Suppose r RF 3 , r M 13 , and b i 1 4 2 Now suppose r RF decreases to 2 The slope of the SML remains constant How would this affect r M and r i Select IIIIIIIVVItem 3 What is r i , the required rate of return on Stock i Round your answer to one decimal place 1 Now suppose r RF increases to 4 The slope of the SML remains constant How would this affect r M and r i r M will increase by 1 percentage point and r i will remain the same Both r M and r i will decrease by 1 percentage point Both r M and r i will remain the same Both r M and r i will increase by 1 percentage point r M will remain the same and r i will increase by 1 percentage point Select IIIIIIIVVItem 2 Both r M and r i will decrease by 1 percentage point r M will decrease by 1 percentage point and r i will remain the same r M will remain the same and r i will decrease by 1 percentage point Both r M and r i will increase by 1 percentage point Both r M and r i will remain the same 1 Now assume that r RF remains at 3 , but r M increases to 14 The slope of the SML does not remain constant How would these changes affect r i Round your answer to one decimal place The new r i will be 2 Now assume that r RF remains at 3 , but r M falls to 12 The slope of the SML does not remain constant How would these changes affect r i Round your answer to one decimal place The new r i will be

Question

Suppose r RF   3 , r M   13 , and b i   1 4  2  Now suppose r RF decreases to 2   The slope of the SML remains constant  How would this affect r M and r i    Select IIIIIIIVVItem 3 What is r i , the required rate of return on Stock i  Round your answer to one decimal place    1  Now suppose r RF increases to 4   The slope of the SML remains constant  How would this affect r M and r i   r M will increase by 1 percentage point and r i will remain the same  Both r M and r i will decrease by 1 percentage point  Both r M and r i will remain the same  Both r M and r i will increase by 1 percentage point  r M will remain the same and r i will increase by 1 percentage point   Select IIIIIIIVVItem 2 Both r M and r i will decrease by 1 percentage point  r M will decrease by 1 percentage point and r i will remain the same  r M will remain the same and r i will decrease by 1 percentage point  Both r M and r i will increase by 1 percentage point  Both r M and r i will remain the same  1  Now assume that r RF remains at 3 , but r M increases to 14   The slope of the SML does not remain constant  How would these changes affect r i   Round your answer to one decimal place  The new r i will be    2  Now assume that r RF remains at 3 , but r M falls to 12   The slope of the SML does not remain constant  How would these changes affect r i   Round your answer to one decimal place  The new r i will be

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Question

Suppose r RF = 3%, r M = 13%, and b i = 1.4. 2. Now suppose r RF decreases to 2%. The slope of

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