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Business, 31.10.2019 00:31 ayleenmorar

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 marginal investor becomes more risk averse, the required return on stock b will increase by more than the required return on stock a. b. an equally weighted portfolio of stocks a and b will have a beta lower than 1.2.c. 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. d. 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. e. stock b's required return is double that of stock a's.

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