3. Problem 8.05 (Beta and Required Rate of Return) A E eBook A stock has a required return of 10%, the risk-free rate is 2.5%, and the market risk premium is 5%. a. What is the stock's beta? Round your answer to two decimal places. b. If the market risk premium increased to 6%, what would happen to the stock's required rate of retum? Assume that the risk-free rate and the beta remain unchanged. Do not round Intermediate calculations. Round your answer to two decimal places 1. If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium II. If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium III. it the stock's beta i fess than 1.0, then the change in required rate of return will be greater than the change in the market risk premium. w. Ir the stocks bote in grater than 15, then the change in required rato at return will be less than the change in the market risk V. If the stock's beta is equal to 1.0, then the change in required rate of return will be greater than the change in the market risk premium premium -Select v Stock's required rate of return will be