Problem 6-12 Required Rate of Return Stock R has a beta of 1.5, Stock S has a beta of 0.50, the expected rate of return on an average stock is 11%, and the risk-free rate is 5%. By how much does the required return on the riskier stock exceed that on the less risky stock? Round your answer to two decimal places.  %

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Problem 6-12
Required Rate of Return

Stock R has a beta of 1.5, Stock S has a beta of 0.50, the expected rate of return on an average stock is 11%, and the risk-free rate is 5%. By how much does the required return on the riskier stock exceed that on the less risky stock? Round your answer to two decimal places.

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