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Suppose rRF=5%,rM=10%, and bi=0.750. a. What is ri, the required rate of return on Stock i? b. Now suppose that rRF increases to 6% and

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Suppose rRF=5%,rM=10%, and bi=0.750. a. What is ri, the required rate of return on Stock i? 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 ri ? a) 8.750%; b) 9.000%; c) 7.250 a) 12.500%; b) 9.750%; c) 6.950% a) 8.250%; b) 9.750%; c) 7.300% a) 8.750%; b) 9.750%; c) 7.250%

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