Answer Happy

You have observed the following returns over time:
с Historical Returns: Expected & Required Rates of Return 1 2 3 Historical Returns: 4 5 6 7 15 16 17 Year 2011 2012 2013 2014 2015 8 9 10 11 Risk-free rate, [RF 12 Market risk premium, RPM 13 % of Stock X in Portfolio 14 % of Stock Y in Portfolio B Portfolio beta, bp Required return on portfolio, rp Stock X 12.00% 17.00% -12.00% 3.00% 21.00% 4.00% 6.00% 80% 20% Stock X Stock Y 11.00% 5.00% -4.00% 2.00% 12.00% Stock Y D Market 13.00% 8.00% -12.00% 1.00% 17.00% Beta, bi 18 Required rate of return, r₁ 19 20 21 22 23 Alternate portfolio return calculation using individual stocks' required returns: 24 Required return on portfolio, rp #N/A #N/A #N/A #N/A #N/A E Formulas #N/A #N/A F