4. Stock A has a beta of 1.3, Stock B has a beta of 0.8, the...

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Finance

4. Stock A has a beta of 1.3, Stock B has a beta of0.8, the expected rate of return on an average stock is 11%, andthe risk-free rate of return is 6.5%. By how much does the requiredreturn on the riskier stock exceed the required return on the lessrisky stock? (Work needed)

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Stock A is more risky because it has a higher beta of 13 Calculate the required return on the risky stock and subtract See Answer

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4. Stock A has a beta of 1.3, Stock B has a beta of0.8, the expected rate of return on an average stock is 11%, andthe risk-free rate of return is 6.5%. By how much does the requiredreturn on the riskier stock exceed the required return on the lessrisky stock? (Work needed)

4. Stock A has a beta of 1.3, Stock B has a beta of 0.8, the...

50.1K

Verified Solution

Question

Finance

4. Stock A has a beta of 1.3, Stock B has a beta of0.8, the expected rate of return on an average stock is 11%, andthe risk-free rate of return is 6.5%. By how much does the requiredreturn on the riskier stock exceed the required return on the lessrisky stock? (Work needed)

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