You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1. You are considering selling $100,000 worth of one stock with a beta of 0.8 and using the proceeds to purchase another stock with a beta of 1.3. What will the portfolio's new beta be after these transactions? Do not round intermediate calculations. Round your answer to two decimal places. You have observed the following returns over time: YearStock XStock YMarket200912%11%10%201019592011-15-8-1220125112013201313 Assume that the risk-free rate is 3% and the market risk premium is 6%. Do not round intermediate calculations. What is the beta of Stock X? Round your answer to two decimal places. What is the beta of Stock Y? Round your answer to two decimal places. What is the required rate of return on Stock X? Round your answer to one decimal place. % What is the required rate of return on Stock Y? Round your answer to one decimal place. % What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place. %
You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1. You are considering selling $100,000 worth of one stock with a beta of 0.8 and using the proceeds to purchase another stock with a beta of 1.3. What will the portfolio's new beta be after these transactions? Do not round intermediate calculations. Round your answer to two decimal places. You have observed the following returns over time: YearStock XStock YMarket200912%11%10%201019592011-15-8-1220125112013201313 Assume that the risk-free rate is 3% and the market risk premium is 6%. Do not round intermediate calculations. What is the beta of Stock X? Round your answer to two decimal places. What is the beta of Stock Y? Round your answer to two decimal places. What is the required rate of return on Stock X? Round your answer to one decimal place. % What is the required rate of return on Stock Y? Round your answer to one decimal place. % What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place. %
Related questions
Problem 6-14
Historical Returns: Expected and Required Rates of Return
You have observed the following returns over time:
| Year | Stock X | Stock Y | Market |
| 2009 | 15% | 13% | 13% |
| 2010 | 17 | 7 | 8 |
| 2011 | -13 | -6 | -10 |
| 2012 | 2 | 3 | 3 |
| 2013 | 20 | 10 | 18 |
Assume that the risk-free rate is 3% and the market risk premium is 6%. Do not round intermediate calculations.
- What is the beta of Stock X? Round your answer to two decimal places.
What is the beta of Stock Y? Round your answer to two decimal places.
- What is the required rate of return on Stock X? Round your answer to one decimal place.
%
What is the required rate of return on Stock Y? Round your answer to one decimal place.
%
- What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to one decimal place.
%
