Stock X has a beta of 2.5 and an expected return of 22.5%. Stock Y has a beta of 1.5 and an expected return of 15.0 %. Also, the market risk premium is 7.2%. What would be the risk - free rate if these two stocks are correctly priced? (solve with excel)
Stock X has a beta of 2.5 and an expected return of 22.5%. Stock Y has a beta of 1.5 and an expected return of 15.0 %. Also, the market risk premium is 7.2%. What would be the risk - free rate if these two stocks are correctly priced? (solve with excel)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Stock X has a beta of 2.5 and an expected return of 22.5%. Stock Y has a beta of 1.5 and an expected return of 15.0 % .
Also, the market risk premium is 7.2%. What would be the risk - free rate if these two stocks are correctly priced? (solve
with excel)
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