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  3. you have observed the following returns over time year stock...

Question: you have observed the following returns over time year stock...

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You have observed the following returns over time:

Year Stock A Stock B

1

20% 13%
2 13% 9%
3 -6% -2%
4 32% 20%
Ravg 14.75% 10%
Standard deviation 15.90% 9.20%

A. What is Stock A's Beta?

B. If the risk free rate is 3% and the market risk premium is 6%, what is the required return for Stock A?

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