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give accurate and complete answer for wrng answer i ll give thmbs down a. What is ri, the required rate of return on Stock i?
give accurate and complete answer for wrng answer i ll give thmbs down
a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. b. 1. Now suppose rRF increases to 7%. The slope of the SML remains constant. How would this affect rm and ri ? I. rM will increase by 1 percentage point and ri will remain the same. II. Both rm and r i will decrease by 1 percentage point. III. Both rm and ri will remain the same. IV. Both rM and ri will increase by 1 percentage point. V. rM will remain the same and r i will increase by 1 percentage point. 2. Now suppose rRF decreases to 5%. The slope of the SML remains constant. How would this affect rM and ri ? I. rM will remain the same and ri will decrease by 1 percentage point. II. Both rm and r i will increase by 1 percentage point. III. Both rm and ri will remain the same. IV. Both rM and ri will decrease by 1 percentage point. V. rM will decrease by 1 percentage point and ri will remain the same. 2. Now suppose rRF decreases to 5%. The slope of the SML remains constant. How would this affect rM and ri ? I. rM will remain the same and ri will decrease by 1 percentage point. II. Both rm and ri will increase by 1 percentage point. III. Both rm and ri will remain the same. IV. Both rM and ri will decrease by 1 percentage point. V. rm will decrease by 1 percentage point and r i will remain the same. c. 1. Now assume that remains at 6%, but rM increases to 10%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new n will be %. 2. Now assume that rRF remains at 6%, but rm falls to 8%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new ri will be %Step by Step Solution
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