Which of the following statements is most correct and why?

a. If beta doubles, the required return doubles.

b. If a stock has a negative beta, its required return is negative.

c. Higher beta stocks have more company - specific risk, but do not necessarily have more market risk.

d. If a portfolio's beta increases from 1.2 to 1.5, its required rate of return will increase by an amount equal to its market risk premium. e. If two s tocks have the same standard deviation and the correlation coefficient between the returns of two stocks equals zero, an equally weighted portfolio of the two stocks will have a standard deviation lower than that of individual stocks