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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?
-Stocks return decreases by 1%.
-Stocks return will be equal to rF.
-Stocks return is not affected.
-Stocks return increases by 1%.
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