3. Problem 8.05 S AZ Click here to read the eBook: The Relationship Between Risk and Rates of Return BETA AND REQUIRED RATE OF RETURN A stock has a required return of 14%; the risk free rate is 6.5%; and the market risk premium is 4% a. What is the stock's beta? Round your answer to two decimal places 1.8 X b. If the market risk premium Increated to 9%, what would happen to the stocks required rate of return? Assume that the risk free rate and the beta remain unchanged 1. 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 rak premium 11. 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 is premium m. If the stockbet is greater than 10, then the change in required rate of return will be greater than the change in the market rik premium IV. If the stock's beta in less than 10, then the change in required rate of return will be greater than the change in the markets premium Vif the stock's beta is greater than 1,0, then the change in requiredirate of return will be less than the change in the market riik premium New stock's required rate of return will be 14 X Round your answer to two decimal places Hide Feedback Partially Correct C tv w