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Author Question: Which of the following statements is correct? (Read 8 times)

heatherbabydoll1

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Which of the following statements is correct?

If the risk-free rate rises by 0.8% but the market risk premium declines by that same amount, then the required rates of return on an average stock will remain unchanged, but required returns on stocks with betas greater than 1.0 will decrease.


Other things held constant, if investors suddenly became convinced that there would be inflation in the economy, then the required returns on all stocks should decrease.


If a company’s beta were cut in half, then its required rate of return would also be halved.


If a company’s beta triples, then its required rate of return will also triple.



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Marked as best answer by heatherbabydoll1 on Aug 7, 2023

KobyRhoads

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heatherbabydoll1

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review


debra928

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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