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If the risk-free rate of return ( r F ) increases by 1%, how would that affect the return on a stock according to the
If the risk-free rate of return (rF) increases by 1%, how would that affect the return on a stock according to the SML, assuming other things being equal?
a. Stocks return will be equal to rF.
b. Stocks return decreases by 1%.
c. Stocks return increases by 1%.
d. Stocks return is not affected.
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