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Question 6: Stock Problem (1 part, 10 points) 6a. Stock A has a beta of 1.2, while stock B has a beta of 0.6. The
Question 6: Stock Problem (1 part, 10 points)
6a. Stock A has a beta of 1.2, while stock B has a beta of 0.6. The expected rate of return on an average stock is 12%. 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? (Show all work.)
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