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d. Statements b and c are correct. e. All of the statements above are correct. xovii. In recent years, both expected inflation and the market risk premium (ku-kRF) have declined. Assume that all stocks have positive betas. Which of the following is likely to have oocurred as a result of these changes? a. The average required return on the market, kM, has remained constant, but the required retums have fallen for stocks that have betas greater than 1.0. b. The required returns on all stocks have fallen by the same amount. c The required returns on all stocks have fallen, but the decline has been greater for stocks with higher betas. d. The required returns on all stocks have fallen. but the decline has been greater for stocks with lower betas. e. The required returns have increased for stocks with betas greater than 1.0 but have declined for stocks with betas less than 1.0. xix Which of the following statements is most correct? a. The slope of the security market line is beta. b. The slope of the security market line is the market risk premium, (k kRF). c you double a company s beta its required return more than doubles. d. Statements a and care correct. e. Statements b and c are comect ook Suppose someone offered you the choice of two equally risky annuities, each paying $10,000 per year for five years. One is an ordinary (or deferred) annuity, the other is an annuity due. Which of the following statements is most correct? a. The present value of the ordinary annuity must exceed the present value of the annuity due, but the future value of an ordinary annuity may be less than the future value of the annuity due. b. The present value of the annuity due exceeds the present value of the ordinary annuity, while the future value of the annuity due is less than the future value of the ordinary annuity. c The present value of the annuity due exceeds the present value of the ordinary annuity, and the future value of the