Time remaining:
What would the risk-free rate have to be for the two stocks to be correctly pric

label Business
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

Stock Y has a beta of 1.3 and an expected return of 15.3 percent. Stock Z has a beta of 0.70 and an expected return of 9.3 percent.

Oct 17th, 2017

15.3-Rf/1.3=9.3-Rf/0.70 this would equal to .70(15.3-Rf)=1.3(9.3-Rf). When you solve for it it the answer is 2.3%

Oct 24th, 2014

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Oct 17th, 2017
...
Oct 17th, 2017
Oct 18th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer