What is the required rate of return on aa stock

Reference no: EM132789118

Question 1: AA Corporation's stock has a beta of 0.9. The risk-free rate is 3% and the expected return on the market is 12%. What is the required rate of return on AA's stock? Round your answer to two decimal places.

Question 2: Your retirement fund consists of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 1.85. Suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 2.25. Calculate your portfolio's new beta. Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132789118

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