S. Problem 8.05 (Beta and Required Rate of Return) eBook A stock has a required retum of 10%, the risk-free rates 5.5%, and the market risk premium is 2% a. What is the stock's beta? Round your answer to two decimal places N b. If the market is premium increased to , what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round Intermediate calculations. Round your answer to two decimal places 1. Ar the stock's beta is greater than 10, then the change in required rate of retum will be greater than the change in the market risk premium. II. If the stocks beta is less than 10, then the change in required rate of return will be greater than the change in the market risk premium III. If the stock's beta is greater than 10, then the change in required rate of retum will be less than the change in the market risk premium IV. If the stock's beta is equal to 1.0, then the change in required rate of retum will be greater than the change in the market is premium V. If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium -Select- Stock's required rate of return will be