Question: CINEM Chapter 8 Assignment Based on the graph complete the table that follows. (Tooltip: mouse over the points in the graph to see their coordinates)

CINEM Chapter 8 Assignment Based on the graph complete the table that follows. (Tooltip: mouse over the points in the graph to see their coordinates) RATOR Value CAPM Elements Risk free rate (RF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp, stock An analyst believes that inflation is going to increase by 3 60% over the next year, while the market isk premium will be unchanged. The analyst uses the Capital Asset Pricing Model (CAPM) The following graph plots the current SML Calculate Happy Corps new required return. Then, olche graph, use the rectangle symbols to por the new SML suggested by this analysts prediction. (Tooltip: Mouse over the points the graph to see their coordinates.) Happy Corps new required rate of retum is (? 20.0 16.0 120 REQUIRED RATE OF RETURN (Percent) 8.0 4.0 0.5 1.5 2.0 1.0 RISK (Beta) day CAPM Elements Value Risk-free rate (RF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock

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