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Author Question: Stock HB has a beta of 1.7 and Stock LB has a beta of 0.9. The market is in equilibrium, with ... (Read 70 times)

gboileau

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on: Aug 7, 2023
Stock HB has a beta of 1.7 and Stock LB has a beta of 0.9. The market is in equilibrium, with required returns equalling expected returns. Which of the following statements is correct?

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If expected inflation remains constant but the market risk premium (rM– rRF) increases, the required return of Stock LB will increase but the required return of Stock HB will decrease.


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If expected inflation remains constant but the market risk premium (rM– rRF) increases, the required return on Stock HB will increase but the required return of Stock LB will decrease.


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If both expected inflation and the market risk premium (rM– rRF) decrease, the required returns of both stocks will decrease by the same amount.


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If both expected inflation and the market risk premium (rM– rRF) decrease, the required return on Stock HB will decrease by more than that of Stock LB.

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Marked as best answer by gboileau on Aug 7, 2023

wangyichun

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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gboileau

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

daiying98

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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