Stock Y has a beta of 1.05 and an expected return of 15.55 percent. Stock Z has

Question

Stock Y has a beta of 1.05 and an expected return of 15.55 percent. Stock Z has a beta of .90 and an expected return of 6 percent. If the risk-free rate is 4.0 percent and the market risk premium is 8.8 percent, what are the reward-to-risk ratios of Y and Z? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

Stock Y has a beta of 1.05 and an expected return of 15.55 percent. Stock Z has a beta of .90 and an expected return of 6 percent. If the risk-free rate is 4.0 percent and the market risk premium is 8.8 percent, what are the reward-to-risk ratios of Y and Z? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

Explanation / Answer

Similarly, substitute for , 80 MPa for ,0.345 for , –30 MPa for , , and for in .

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