If a company's beta were to double, would its expected return double? Why or why not?
No, it would not. The expected return from stock is the sum of the risk-free rate and the risk premium: r = rRF + B*(rM - rRF). If the company's beta doubles, the market premium doubles but the risk-free rate remains the same, so that the expected return is less than double.
MBA, Professor of finance and business mathematics