Time Remaining: 1. The risk-free rate is 6…

Time Remaining: 1. The risk-free rate is 6%; Stock A has a beta of 1.0; Stock B has a beta of 2.0, and the market risk premium, rM – rRF, is positive. Which of the following statements is correct? (Points: 3) Stock B’s required rate of return is twice that of Stock A. If Stock A’s required return is 11%, the market risk premium is 5%. If Stock B’s required return is 11%, the market risk premium is 5%. If the risk-free rate increases but the market risk premium stays unchanged, Stock B’s required return will increase by more than Stock A’s. If the risk-free rate remains constant but the market risk premium increases, Stock A’s required return will increase by more than Stock A’s.