5. Risk Premium (S7.1) Suppose that in year 2030, investors become much more willing than before to...
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5. Risk Premium (S7.1) Suppose that in year 2030, investors become much more willing than before to bear risk. As a result, they require a return of 8% to invest in common stocks rather than the 10% that they had required in the past. This shift in risk aversion causes a 15%
change in the value of the market portfolio.
a. Do stock prices rise by 15% or fall?
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Related Book For 
Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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