Question: 8 - 1 3 . If a company s beta increased from 1 . 5 to 4 . 5 , would its expected rate of

8-13. If a companys beta increased from 1.5 to 4.5, would its expected rate of return triple? Explain why or why not. (Hint: Assume the risk-free rate is 4 percent and the market risk premium is 5 percent.)

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