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Business, 31.10.2019 02:31 sav99

Stock a has a beta of 0.7, whereas stock b has a beta of 1.3. portfolio p has 50% invested in both a and b. which of the following would occur if the market risk premium increased by 1% but the risk-free rate remained constant? a. the required return on both stocks would increase by 1%.b. the required return on portfolio p would remain unchanged. c. the required return on stock a would increase by more than 1%, while the return on stock b would increase by less than 1%.d. the required return for stock a would fall, but the required return for stock b would increase. e. the required return on portfolio p would increase by 1%.

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