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8. Changes to the security market line The following graph plots the current security market line (SML) and indicates the return that investors require from

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8. Changes to the security market line The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows. REQUIRED RATE OF RETURN (Percent 20.0 16.0 12.0 Return on HC's Stock 8.0- 4.0 2.0 RISK (Beta) 0.0 0.5 1.0 1.5 CAPM Elements Value Risk-free rate (rRF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock

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