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Question 7 1 pts The risk of stock ABC has been evaluated at = 1.4. Suppose the rate of return on three month T- bill
Question 7 1 pts The risk of stock ABC has been evaluated at = 1.4. Suppose the rate of return on three month T- bill is about 5%. Suppose also that the market risk premium is 11%. The stock is fairly priced. If there is a market crash, and the market risk premium doubles, all else equal, how will the stock price change? Attention: if the price decrease, you should get a negative number. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321
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