Question: Can someone please help me thanks 3. Problem 8.05 (Beta and Required Rate of Return) A stock has a required return of 12%, the risk-free

Can someone please help me thanks
3. Problem 8.05 (Beta and Required Rate of Return) A stock has a required return of 12%, the risk-free rate is 6.5%, and the market risk premium is 2%. a. What is the stock's beta? Round your answer to two decimal places. your answer to two decimal places. I. 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. If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium. IV. If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium. 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. Stock's required rate of return will be %. 3. Problem 8.05 (Beta and Required Rate of Return) A stock has a required return of 12%, the risk-free rate is 6.5%, and the market risk premium is 2%. a. What is the stock's beta? Round your answer to two decimal places. your answer to two decimal places. I. 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. If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium. IV. If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium. 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. Stock's required rate of return will be %
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
