Assuming that the risk-free rate (RRFR) is 5% and the market risk premium (RM - RRFR) is 8%, which of the following statements is correct?
a) An index fund with beta = 1.0 should have a required return of 15%.
b) A stock mutual fund with beta = 1.5 should have a required return of 17%.
c) If a stock's beta doubles, its required return must also double.
d) If a stock has a negative beta, its required return must also be negative.
e) A stock fund with beta = 1.25 should have a required return greater than 15%.
