Stock a has a beta of 12 and a standard deviation of, Financial Management

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Stock a has a beta of 12 and a standard deviation of

Stock A has a beta of 1.2 and a standard deviation of returns of 14%. Stock B has a beta of 1.8 and a standard deviation of returns of 18%. If the risk free rate of return increases and the market risk premium remains constant, then _________

a. The required rate of return on Stock B will increase more than the required rate of return on stock A.

b. The required returns on stocks A and B will both increase by the same amount.

c. The required returns on stocks A and B will remain the same

d. The required return on stock A will increase more than the required return on Stock B.

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Financial Management: Stock a has a beta of 12 and a standard deviation of

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Financial Management: Stock a has a beta of 12 and a standard deviation of

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