FINC 3131 – Stock V has a beta coefficient of 2.0 and Stock W has a beta of 0.5.

8-17Stock V has a beta coefficient of 2.0 and Stock W has a beta of 0.5. The expected rate of return on an average stock is 11 percent and the risk-free rate of return is 5 percent. By how much does the required return on the riskier stock exceed the required return on the less risky stock?