Suppose r RF 7 , r M 13 , and b i 1 9 2 Now suppose r RF decreases to 6 The slope of the SML remains constant How would this affect r M and r i What is r i , the required rate of return on Stock i Round your answer to two decimal places 1 Now suppose r RF increases to 8 The slope of the SML remains constant How would this affect r M and r i Both r M and r i will decrease by 1 Both r M and r i will remain the same Both r M and r i will increase by 1 r M will remain the same and r i will increase by 1 r M will increase by 1 and r i will remain the same Select IIIIIIIVV r M will decrease by 1 and r i will remain the same r M will remain the same and r i will decrease by 1 Both r M and r i will increase by 1 Both r M and r i will remain the same Both r M and r i will decrease by 1 Select IIIIIIIVV 1 Now assume that r RF remains at 7 , 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 two decimal places The new r i will be 2 Now assume that r RF remains at 7 , 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 two decimal places The new r i will be

Question

Suppose r RF   7 , r M   13 , and b i   1 9  2  Now suppose r RF decreases to 6   The slope of the SML remains constant  How would this affect r M and r i   What is r i , the required rate of return on Stock i  Round your answer to two decimal places    1  Now suppose r RF increases to 8   The slope of the SML remains constant  How would this affect r M and r i   Both r M and r i will decrease by 1   Both r M and r i will remain the same  Both r M and r i will increase by 1   r M will remain the same and r i will increase by 1   r M will increase by 1  and r i will remain the same   Select IIIIIIIVV r M will decrease by 1  and r i will remain the same  r M will remain the same and r i will decrease by 1   Both r M and r i will increase by 1   Both r M and r i will remain the same  Both r M and r i will decrease by 1    Select IIIIIIIVV 1  Now assume that r RF remains at 7 , 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 two decimal places  The new r i will be      2  Now assume that r RF remains at 7 , 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 two decimal places  The new r i will be

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Question

Suppose r RF = 7%, r M = 13%, and b i = 1.9. 2. Now suppose r RF decreases to 6%. The slope of

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