Q6. Chapters 9-12

Company A has a beta of 0.70, while Company B's beta is 1.10. The required return on the stock market is 9.00%, and the risk-free rate is 2.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.) Do not round your intermediate calculations.

Group of answer choices

*2.70%

*2.81%

*2.86%

*2.48%

*3.16%