Stock y has a beta of 12 and an expected return of 137


Stock Y has a beta of 1.2 and an expected return of 13.7 percent. Stock Z has a beta of .8 and an expected return of 9.5 percent. If the risk-free rate is 5.3 percent and the market risk premium is 6.3 percent, the reward-to-risk ratios for stocks Y and Z are---------- and --------- percent, respectively. Since the SML reward-to-risk is -----------percent, Stock Y is undervalued and Stock Z is overvalued. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

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Financial Management: Stock y has a beta of 12 and an expected return of 137
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