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Stock A has a beta of 1.30, and its required return is 13.25%. Stock B's beta is 0.90. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)
1. 10.63%
2. 7.69%
3. 12.08%
4. 9.28%
5. 10.28%