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please help abc Suppose rRF=4%,rM=13%, and bi=1.4. a. What is n, the required rate of return on Stock i? Round your answer to one decimal
please help abc
Suppose rRF=4%,rM=13%, and bi=1.4. a. What is n, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rRF increases to 5%. The slope of the SML remains constant. How would this affect rM and n ? I. Both rM and n will remain the same. II. Both rm and n will increase by 1 percentage point. III. rM will remain the same and n will increase by 1 percentage point. IV. rm will increase by 1 percentage point and ri will remain the same. V. Both rM and r1 will decrease by 1 percentage point. 2. Now suppose rRF decreases to 3%. The slope of the SML remains constant. How would this affect rM and r? ? I. Both rM and n will remain the same. II. Both rm and n will decrease by 1 percentage point. III. rM will decrease by 1 percentage point and n will remain the same. IV. rm will remain the same and n will decrease by 1 percentage point. V. Both rm and n will increase by 1 percentage point. c. 1. Now assume that rRF remains at 4%, but rM increases to 14%. - The slope of the SML does not remain constant. How would these changes affect r ? Round your answer to one decimal place. The new n will be %. 2. Now suppose rRF decreases to 3%. The slope of the SML remains constant. How would this affect rM and ri ? I. Both rm and ri will remain the same. II. Both rM and ri will decrease by 1 percentage point. III. rM will decrease by 1 percentage point and ri will remain the same. IV. rM will remain the same and ri will decrease by 1 percentage point. V. Both rmm and ri will increase by 1 percentage point. c. 1. Now assume that rRF remains at 4%, but rmm increases to 14%. The slope of the SML does not remain constant. How would these changes affect ri ? Round your answer to one decimal place. The new riwillbe %. 2. Now assume that rRF remains at 4%, but rM falls to 12%. 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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