A. The current risk-free rate (RF) is 4 percent, and the expected return on the market for the coming year is 12 percent. Calculate the required rate of return for (1) stock A, with a beta of 1.0, (2) stock B, with a beta of 1.7, and (3) stock C, with a beta of 0.8.

B. How would your answers change if RF in part (a) were to increase to 6 percent, with the other variables unchanged?

c. How would your answers change if the expected return on the market changed to 15 percent, with the other variables unchanged from A above?