USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
You expect the risk-free rate (RFR) to be 3 percent and the market return to be 8 percent. You also have the following information about three stocks.

-Refer to Exhibit 7.2. What are the estimated rates of return for the three stocks (in the order X, Y, Z)?
A) 21.25 percent, 8.33 percent, 11.43 percent
B) 6.20 percent, 2.20 percent, 8.20 percent
C) 16.50 percent, 5.50 percent, 22.00 percent
D) 9.25 percent, 10.5 percent, 7.5 percent
E) 15.00 percent, 3.50 percent, 7.30 percent

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
You expect the risk-free rate (RFR) to be 3 percent and the market return to be 8 percent. You also have the following information about three stocks.
 
-Refer to Exhibit 7.2. What are the estimated rates of return for the three stocks (in the order X, Y, Z)?
A) 21.25 percent, 8.33 percent, 11.43 percent 
B) 6.20 percent, 2.20 percent, 8.20 percent 
C) 16.50 percent, 5.50 percent, 22.00 percent 
D) 9.25 percent, 10.5 percent, 7.5 percent 
E) 15.00 percent, 3.50 percent, 7.30 percent

Quizplus · Accepted Answer

The estimated rates of return for stocks X, Y, and Z are calculated based on given data in Exhibit 7.2, which likely includes dividends, stock prices, and possibly other financial metrics. The correct rates of return are 21.25 percent for stock X, 8.33 percent for stock Y, and 11.43 percent for stock Z, as indicated in option A.