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Business, 12.11.2019 06:31 scottcounts757

Stock a has a beta = 0.8, while stock b has a beta = 1.6. which of the following statements is correct? a. if the risk-free rate increases but the market risk premium remains constant, the required return on stock a will increase by more than that on stock b. b. if the marginal investor becomes more risk averse, the required return on stock b will increase by more than the required return on stock a. c. stock b's required return is double that of stock a's. d. if the marginal investor becomes more risk averse, the required return on stock a will increase by more than the required return on stock b. e. an equally weighted portfolio of stocks a and b will have a beta lower than 1.2.

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