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Suppose rRF=5%,rM=10%, and b1=0.150. a. What is r, the required rate of return on Stock it b. Now suppose that rRF increases to 6% and

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Suppose rRF=5%,rM=10%, and b1=0.150. a. What is r, the required rate of return on Stock it b. Now suppose that rRF increases to 6% and the slope of the SML remains constant. Recalculate ri ? c. Now assume that rRF remains at 5% but rM falls to 8%. The slope of the SML does not remain constant. Recalculate r1 ? a) 5.750%; b) 6.600%; c) 5.450 a) 5.750%; b) 6.750%; c) 6.300% a) 6.500%; b) 6.750%; c) 5.450% a) 5.750%; b) 6.750%; c)5.450\%

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