Stock X and the "Market" Have Had the Following Rates

question 3

Multiple Choice

Stock X and the "market" have had the following rates of returns over the past four years. 60% of your portfolio is invested in Stock X and the remaining 40% is invested in Stock Y.The risk-free rate is 6% and the market risk premium is also 6%.You estimate that 14% is the required rate of return on your portfolio.What is the beta of Stock Y?

• A)1.72
• B)1.91
• C)2.10
• D)2.31
• E)2.54

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