Question: find the steps to the two questions below. Do you have any insight? 3. Company A has a beta of 0.70, while Company B's

find the steps to the two questions below. Do you have any insight?

3. Company A has a beta of 0.70, while Company B's beta is 1.20. 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.)

4. Mike Flannery holds the following portfolio:

Stock Investment Beta

A $150,000 1.40

B 50,000 0.80

C 100,000 1.00

D 75,000 1.20

What is the portfolio's beta?

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