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Author Question: Assume that the risk-free rate, rRF, declines but the market risk premium, (rM rRF) increases, with ... (Read 70 times)

bubba123

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on: Aug 7, 2023
Assume that the risk-free rate, rRF, declines but the market risk premium, (rM– rRF) increases, with the net effect being that the overall required return on the market, rM, remains constant. Which of the following statements is correct?

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The required return of all stocks will decrease by the amount of the decrease in the risk-free rate.


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The required return will increase for stocks that have a beta less than 1.0 but will decline for stocks that have a beta greater than 1.0.


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The required return will decline for stocks that have a beta less than 1.0 but increase for stocks that have a beta greater than 1.0.


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Since the overall return on the market stays constant, the required return on each individual stock will remain constant.

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Marked as best answer by bubba123 on Aug 7, 2023

furthoh

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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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bubba123

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

dyrone

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

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