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Stock A's Stock Has a Beta of 1

question 26

Multiple Choice

Stock A's stock has a beta of 1.30, and its required return is 12.00%.Stock B's beta is 0.80.If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)


Definitions:

Edema

Swelling caused by excess fluid trapped in the body's tissues, often affecting the legs, feet, or arms, and can result from various medical conditions.

Discolored Skin

A change in skin color, which may be a sign of injury, illness, or other medical conditions.

Sodium

A chemical element, symbol Na, that is a highly reactive metal and an essential component of animal and human physiology, particularly in the regulation of fluids and blood pressure.

Potassium

A chemical element with symbol K, essential for various bodily functions including heart rate and muscle function.

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