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Stock A has an Equity Beta of 1.2 and Stock B has an Equity Beta of 1.6. Using concepts from portfolio theory and the Capital
Stock A has an Equity Beta of 1.2 and Stock B has an Equity Beta of 1.6. Using concepts from portfolio theory and the Capital Asset Pricing Model, determine whether each of the following two statements is true, false, or cannot be determined from the information provided.
1. Stock A should have a higher required return than Stock B.
2. Stock A will have higher standard deviation of returns than Stock B
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