## (Solved) REQUIRED RATE OF RETURN Suppose r RF = 9%, r M = 14%, and b i = 1.3. a. What is r i , the...

REQUIRED RATE OF RETURN   Suppose rRF = 9%, rM = 14%, and bi = 1.3. a.        What is ri, the required rate of return on Stock i? b.       Now suppose that rRF (1) increases to 10% or (2) decreases to 8%. The slope of the SML remains constant. How would this affect rM and ri? c.        Now assume that rRF remains at 9% but rM (1) increases to 16% or (2) falls to 13%. The slope of the SML does not remain constant. How would these changes affect ri?

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This question was answered on: Oct 15, 2019

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