Company a has a beta of 0.70, while company b's beta is 1.20. the required return on the stock market is 11.00%, and the risk-free rate is 4.25%. what is the difference between a's and b's required rates of return?

The difference between A and B Required Rate of Return is 3.38%

Explanation:

As we know that required rate of return we use CAPM formula that is

Required rate of return = Rf + (Rm - Rf) x Beta

Stock A Return = 4.25% + (11% - 4.25% )  x 0.70

Stock A return = 8.98%

Stock B Return = 4.25% + (11% - 4.25%) x 1.20

Stock B Return = 12.35%

Difference between Return = Stock B Return - Stock A Return

Difference between Return = 12.35% - 8.98%

Difference between Return = 3.38%

b, fewer problems later! good luck

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know