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
Correct Answer:
Verified
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