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Suppose rRF = 5%, rM = 10%, and rA =

Suppose rRF = 5%, rM = 10%, and rA =

Suppose rRF = 5%, rM = 10%, and rA = 12%.

a. Calculate Stock A’s beta.

b. If Stock A’s beta were 2.0, what would be A’s new required rate of return?

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