In: Finance
Suppose rRF = 7%, rM = 9%, and bi = 2.2.
2. Now suppose rRF decreases to 6%. The slope of the SML remains constant. How would this affect rM and ri?
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What is ri, the required rate of return on Stock i?
Round your answer to two decimal places.
%
1. Now suppose rRF increases to 8%. The slope of the SML remains constant. How would this affect rM and ri?
1. Now assume that rRF remains at 7%, but rM increases to 10%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places.
The new ri will be %.2. Now assume that rRF remains at 7%, but rM falls to 8%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places.
The new ri will be %.