Under the following conditions,what are the expected returns for stocks Y and Z?
$\begin{array}{ll}
\lambda^{0}=0.05 & \mathrm{~b}_{\mathrm{y}, 1}=0.75 \
\mathrm{k}_{1}=0.06 & \mathrm{~b}_{\mathrm{y}, 2}=1.35 \
\mathrm{k}_{2}=0.05 & \mathrm{~b}_{\mathrm{z}, 1}=1.5 \
& \mathrm{~b}_{\mathrm{z}, 2}=0.85
\end{array}$
A) 17.61% and 13.23%
B) 16.25% and 18.25%
C) 13.24% and 28.46%
D) 14.83% and 17.69%
E) None of the above

Question

Quizplus · Accepted Answer

$\begin{aligned}
R_{y} &=\lambda^{0}+\left(b_{y, 1}\right)\left(k_{1}\right)+\left(b_{\gamma, 2}\right)\left(k_{2}\right) \
&=0.05+(0.75)(0.06)+(1.35)(0.05\
&=1625 \%
\end{aligned}$
 $R_{z}$$$\begin{array} { l } 
= \lambda ^ { 0 } + \left( b _ { z _ { 2 } } \right) \left( \mathbf { k } _ { 1 } \right) + \left( \mathrm { b } _ { \mathrm { z } , } \right) \left( \mathrm { k } _ { 2 } \right) \
= 0.05 + ( 1.5 ) ( 0.06 ) + ( 0.85 ) ( 0.05 ) \
= 18.25 \%
\end{array}$$

Under the Following Conditions,what Are the Expected Returns for Stocks