Under the following conditions,what are the expected returns for stocks Y and Z?
$\begin{array}{ll}
\lambda^{0}=0.04 & \mathrm{~b}_{\mathrm{y}, 1}=0.5\
\mathrm{k}_{1}=0.07 & \mathrm{~b}_{\mathrm{y}, 2}=1.3 \
\mathrm{k}_{2}=0.05 & \mathrm{~b}_{\mathrm{z}_{, 1}}=1.2 \
& \mathrm{~b}_{\mathrm{z}, 2}=0.9
\end{array}$
A) 12.0% and 13.3%
B) 13.5% and 14.2%
C) 13.9% and 15.6%
D) 14.0% and 16.9%
E) 15.8% and 17.3%

Question

Quizplus · Accepted Answer

$\R_y$$$\begin{array} { l } 
= \lambda ^ { 0 } + \left( \mathrm { b } _ { 5.1 } \right) \left( \mathbf { k } _ { 1 } \right) + \left( \mathrm { b } _ { 5 , } \right) \left( \mathbf { k } _ { 2 } \right) \
= 0 .04 + ( 0.5 ) ( 0.07 ) + ( 1.3 ) ( 0.05 ) \
= 0.04 + 0.035 + 0.065 = 14.0 \%
\end{array}$$ $R_{z}$$$\begin{array} { l } 
= \lambda ^ { 0 } + \left( \mathrm { b } _ { 2 } \right) \left( \mathbf { c } _ { 1 } \right) + \left( \mathrm { b } _ { z _ { 2 } } \right) \left( \mathrm { k } _ { 2 } \right) \
= 0 .04 + ( 1.2 ) ( 0.07 ) + ( 0.9 ) ( 0.05 ) \
= 0.04 + 0.004 + 0.045 = 16.989
\end{array}$$

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