1)

Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 14.5%; r_RF = 3.5%; r_M = 11.5%. Round your answer to two decimal places.

2)

Stock R has a beta of 2.0, Stock S has a beta of 0.35, the required return on an average stock is 14%, and the risk-free rate of return is 6%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places.

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