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    Difference in required rate of return

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    1. Company A has a beta of 0.70, while Company B's beta is 0.80. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.)
    0.57%
    0.77%
    0.68%
    0.67%
    0.80%

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    https://brainmass.com/business/beta-and-required-return-of-a-project/difference-in-required-rate-of-return-307734

    Solution Preview

    Use the CAPM to calculate the rate of return on the two securities
    Rate of ...

    Solution Summary

    The solution explains how to calculate the difference in required rate of return for two stocks.

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