Question: Consider the scenario where the current 3 0 - day risk - free treasury bill pays 3 . 6 % and solve for the following:

Consider the scenario where the current 30-day risk-free treasury bill pays 3.6% and solve for the following:
a. If the market risk premium is 5%, what is the required return for a stock with a beta of 1.2?
b. Assuming a required rate of return in the general equity market of 10.5%, what is the difference in required returns between a stock with a beta of 1.0 and another with a beta of 1.8?
c. A stock with a beta of 0.6 while a similar stock with a beta of 1.2 earns a 10.3% rate of return.

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