Suppose r RF 8 , r M 9 , and b i 1 3 What is r i , the required rate of return on Stock i Round your answer to two decimal places Now suppose r RF increases to 9 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 Now suppose r RF decreases to 7 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 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 Now assume that r RF remains at 8 but r M increases to 10 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 Now assume that r RF remains at 8 but r M falls to 8 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   8 , r M   9 , and b i   1 3  What is r i , the required rate of return on Stock i  Round your answer to two decimal places   Now suppose r RF increases to 9   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  Now suppose r RF decreases to 7   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   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  Now assume that r RF remains at 8  but r M increases to 10   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  Now assume that r RF remains at 8  but r M falls to 8   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 = 8%, r M = 9%, and b i = 1.3. What is r i , the required rate of return on

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