15. HR Corporation has a beta of 2.0, while LR Corporation's beta is 1.2. The risk- free rate is 7%, and the required return on the market risk is 13%. What will be the difference in required returns on HR's and LR's stocks? a. 1.0% b. 2.5% c. 4.8% d. 5.4% e. 6.000 16. According to the following information, which of the stocks would be considered riskiest in a diversified portfolio of investments? Stock ABC FGH MNO TUV Standard deviation Beta 4.0 0.5 2.4 1.0 12.5% 8.0% 20.2% 15.3% a. Stock MNO, because it has the highest standard deviation. b. Stock ABC, because it has the highest beta. c. Stock FGH, because it has the highest standard deviation/beta ratio d. Stock TUV, because its beta is the same as the market beta. e. None of the answers are correct 17. You have been managing a $4 million portfolio that has a beta of 1.5 and a required rate of return of 1 3%. The current risk-free rate is 55%. Assume that you receive another $1 million. If you invest the money in a stock with a beta of 1.75, what will be the required return on your $5 million portfolio? a. 10.75% b. 11.50% c. 12.25% d. 12.75% e. 13.25% 18. A stock is expected to pay a dividend of $0.50 at the end of the year (Di-0.50), and it should continue to grow at a constant rate of 4% a year. If its required return is 12%, what is the stock's expected price a $6.76 b. $7.03 c. $7.31 d. $8.27 e. $8.68 3 years from today