Stock y has a beta of 107 and an expected return of 1310


Stock Y has a beta of 1.07 and an expected return of 13.10 percent. Stock Z has a beta of .50 and an expected return of 7 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

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Financial Management: Stock y has a beta of 107 and an expected return of 1310
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