4. Stock A has a beta of 1.2, Stock B has a beta of 0.6 , the expected rate of return on an average stock is 12%, and the risk-free rate of return is 7%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? 5. You are managing a portfolio of 10 stocks that are held in equal dollar amounts. The current beta of the portfolio is 1.8, and the beta of Stock A is 2.0. If Stock A is sold and replaced with a new stock, what does the beta of the replacement stock have to be to lower the portfolio beta to 1.7 ? 6. You have the opportunity to invest in one of two stocks. Stock A has an expected return of 7.6% with a standard deviation of 3.1% while Stock B has an expected return of 16.5% with a standard deviation of 20.2. Using the correlation coefficient, which stock would you invest in? What does the correlation coefficient tell you