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(b) What are the values for Ra and Rb? 4. Suppose you estimate that stock A has a yolatility of 35% and a beta of

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(b) What are the values for Ra and Rb? 4. Suppose you estimate that stock A has a yolatility of 35% and a beta of 1.51, whereas stock B has a volatility of 63% and a beta of 0.72. (a) Which stock has more total risk? (b) Which stock has more market risk? (c) Suppose the risk-free rate is 3% and you estimate the market's expected return as 10%. Which firm has a higher cost of equity capital

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