Question: Company A has a beta of 0 . 7 0 , while Company B ' s beta is 1 . 0 5 . The required

Company A has a beta of 0.70, while Company B's beta is 1.05. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.)
Select the correct answer.
A.
2.30%
B.
2.32%
C.
2.34%
D.
2.38%
E.
2.36%

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