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The risk-free rate is 6%; Stock A has a beta of 1.0; Stock B has a beta of 2.0; and the market risk premium, rM
The risk-free rate is 6%; Stock A has a beta of 1.0; Stock B has a beta of 2.0; and the market risk premium, rM rRF, is positive. Which one is CORRECT? Question 18 options: If the risk-free rate increases but the market risk premium stays unchanged, Stock B's required return will increase by more than Stock A's If Stock A's required return is 11%, then the market risk premium is 5%. If Stock B's required return is 11%, then the market risk premium is 5%. Stock B's required rate of return is twice that of Stock A
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