32. Assume that in recent years both expected inflation and the market risk premium (r-Fe) have declined. Assume also that all stocks have positive betas. Which of the following would be most likely to have occurred as a result of these changes? The required returns on all stocks have fallen, but the decline has been greater for b. The required returns on all stocks have fallen, but the fall has been greater for stocks c. The average required return on the market, rm, has remained constant, but the required d. Required returns have increased for stocks with betas greater than 1.0 but have e. The required returns on all stocks have fallen by the same amount. stocks with lower betas. with higher betas. returns have fallen for stocks that have betas greater than 1.0. declined for stocks with betas less than 1.0. 33. For markets to be in equilibrium, in other words, for there to be no strong pressure for prices to depart from their current levels: a. The expected rate of return must be equal to the required rate of return. b. The past realized rate of return must be equal to the expected future rate of return. c. The required rate of return must equal the past realized rate of return. d. All three of the above statements must hold for equilibrium to exist. e. None of the above statements is correct 34. Cheng Inc. is considering a capital budgeting project that has an expected return of 24% and a standard deviation of 30%, what is the project's coefficient of variation? Do not round your intermediate calculations. Round the final answer to 2 decimal places. 1.08 b. 1.40 1.03 d. 1.25 e. 0.99 35. Jim Angel holds a $200,000 portfolio consisting of the following stocks: Stock Investment Beta $50,000 $50,000 $50,000 $50,000 $200,000 1.20 0.80 1.00 1.20 Total What is the portfolio's beta? Do not round your intermediate calculations. a. 1.239 b. 1.040 c. 0.861 d. 0.809 e. 1.050