Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y

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answerhappygod
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Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y

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Stock X has a 10% expected return, a beta coefficient
of 0.9, and a 35% standard deviation of expected returns.
Stock Y has a 12.5% expected return, a beta coefficient of
1.2, and a 25% standard deviation. The risk-free rate is 6%, and
the market risk premium is 5%.
a. Which stock is riskier for a diversified
investor?
b. Calculate 50/50 portfolio’s required rate of return and
market rate .
c. Calculate the required return of a portfolio that has
$7,500 invested in Stock X and
$2,500 invested in Stock Y.
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