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HR Corporation has a beta of 2.0, while LR Corporation's beta is 1.4. The risk-free rate is 7%, and the required return on the market

  1. HR Corporation has a beta of 2.0, while LR Corporation's beta is 1.4. 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.

3.6%

c.

4.8%

d.

5.2%

e.

6.0%

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