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1. For a risk-free return rate of 5%, a market risk premium of 6%, what is the required rate of return for a security with
1. For a risk-free return rate of 5%, a market risk premium of 6%, what is the required rate of return for a security with a beta coefficient of 1.5? a. 5% b. 9% c. 14% d. cannot be determined -Select- 2. Changing the risk-free return (inflation) a. Changes neither the y-intercept nor the slope of the security market line b. Changes only the y-intercept of the security market line C. Changes only the slope of the security market line d. Changes both the y-intercept and the slope of the security market line -Select- 3. Changing the market risk premium a. Changes neither the y-intercept nor the slope of the security market line b. Changes only the y-intercept of the security market line C. Changes only the slope of the security market line d. Changes both the y-intercept and the slope of the security market line -Select- 4. True or False: If a company's beta doubles, its required return doubles. a. True b. False
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