4
answers
0
watching
26
views
28 Nov 2019
13. The risk-free rate is 6%; Stock A has a beta of 1.0; Stock B has a beta of 2.0; and the market risk premium, rM ? rRF, is positive. Which of the following statements is CORRECT?A If the risk-free rate increases but themarket risk premium stays unchanged, Stock B's required return will increase by more than Stock A's. B Stock B's required rate of return is twicethat of Stock A. C If Stock A's required return is 11%, then the market risk premium is 5%. D If Stock B's required return is 11%, thenthe market risk premium is 5%. E If the risk-free rate remains constant but the market risk premium increases, Stock A's required return will increase by more than Stock B's.
13. The risk-free rate is 6%; Stock A has a beta of 1.0; Stock B has a beta of 2.0; and the market risk premium, rM ? rRF, is positive. Which of the following statements is CORRECT?A If the risk-free rate increases but themarket risk premium stays unchanged, Stock B's required return will increase by more than Stock A's. B Stock B's required rate of return is twicethat of Stock A. C If Stock A's required return is 11%, then the market risk premium is 5%. D If Stock B's required return is 11%, thenthe market risk premium is 5%. E If the risk-free rate remains constant but the market risk premium increases, Stock A's required return will increase by more than Stock B's.
steven03Lv10
30 May 2023
Unlock all answers
Get 1 free homework help answer.
Already have an account? Log in
26 May 2023
Get unlimited access
Already have an account? Log in
jagdishbhagatLv10
25 May 2023
Get unlimited access
Already have an account? Log in
Reid WolffLv2
8 Jun 2019
Get unlimited access
Already have an account? Log in