Calculate stocks beta and required rate of return
Question: Suppose rRF = 5%, rM = 10%, and rA = 12%.
a. Calculate Stock A's beta.
b. If stock A's beta were 2.0, what would be A's new required rate of return?
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Based solely on the stocks' expected returns and risk, as measured by Beta, which one represents the best investment? Be sure to justify your answer.
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a. Calculate Stock A's beta. b. If stock A's beta were 2.0, what would be A's new required rate of return?
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