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Business, 12.11.2019 05:31 jamalnellum56

Stock a has a beta of 0.8 and stock b has a beta of 1.2. 50% of portfolio p is invested in stock a and 50% is invested in stock b. if the market risk premium (rm - rrf) were to increase but the risk-free rate (rrf) remained constant, which of the following would occur? a. the required return would decrease by the same amount for both stock a and stock b. b. the required return on portfolio p would remain unchanged. c. the required return would increase for stock a but decrease for stock b. d. the required return would increase for stock b but decrease for stock a. e. the required return would increase for both stocks but the increase would be greater for stock b than for stock a.

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