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Problem 8.12 (Required Rate of Return) Suppose FRF = 6%, PM = 12%, and b; = 1.5. a) What is ri, the required rate of return on Stack i? Round answer to one decimal place. your 5) Now assume that RF remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant, How would these changes affect ri? The new ri will be C) Now assume that VRF remains at 6%, but Irm fulls to 11%. The slope of the SML does not remain constant. How would these changes affect The new ri will be

Problem 8.12 (Required Rate of Return) Suppose FRF = 6%, PM = 12%, and b; = 1.5. a) What is ri, the required rate of return on Stack i? Round answer to one decimal place. your 5) Now assume that RF remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant, How would these changes affect ri? The new ri will be C) Now assume that VRF remains at 6%, but Irm fulls to 11%. The slope of the SML does not remain constant. How would these changes affect The new ri will be

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Problem 8.12 (Required Rate of Return) Suppose FRF = 6%, rm = 12%, and b; = 1.5. a) what is ri, the required rate of return on Stock i? Round your answer to one decimal place. 5) Now assume that VRF remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant, How would these changes affect ri? The new ri will be C) Now assume that VRF remains at 6%, but YM fulls to 11%. The slope of the SML does not remain constant. How would these changes affect rif The new ri will be 11
Transcribed Image Text:Problem 8.12 (Required Rate of Return) Suppose FRF = 6%, rm = 12%, and b; = 1.5. a) what is ri, the required rate of return on Stock i? Round your answer to one decimal place. 5) Now assume that VRF remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant, How would these changes affect ri? The new ri will be C) Now assume that VRF remains at 6%, but YM fulls to 11%. The slope of the SML does not remain constant. How would these changes affect rif The new ri will be 11
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