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# Problem 6-13 &quot;TUTOR WILL YOU PLEASE PLACE RESULTS OF HOMEWORK IN A EXCEL SPREADSHEET, THANK YOU Historical Returns:

Problem 6-13 "TUTOR WILL YOU PLEASE PLACE RESULTS OF HOMEWORK IN A EXCEL SPREADSHEET, THANK YOU
Historical Returns: Expected and Required Rates of Return

You have observed the following returns over time:
Year Stock X Stock Y Market
2006 14% 11% 12%
2007 18 6 8
2008 -12 -8 -13
2009 5 2 2
2010 18 12 12
Assume that the risk-free rate is 3% and the market risk premium is 14%

QUESTION-C: What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y? Round your answer to two decimal places.
%
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Solution:
Year
2006
2007
2008
2009
2010
Covariance (X,Mar)
Covariance (Y,Mar)
Variance (Market)
SD (Market)
Beta X =
Beta Y =
Required return of X=
Required return of Y=
Portfolio Return = Stock X...

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