In: Finance
Suppose rRF = 6%, rM = 11%, and bi = 1.5.
2. Now suppose rRF decreases to 5%. 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 7%. The slope of the SML remains constant. How would this affect rM and ri?
1. Now assume that rRF remains at 6%, but rM increases to 12%. 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 6%, but rM falls 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 %.
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QUESTION IS NOT PROPERLY FRAMED, BUT NO WORRIES.