Question: If rRF = 5%, rM = 11%, and b = 1.3 for Stock X, a. what is rX, the required rate of return for Stock

If rRF = 5%, rM = 11%, and b = 1.3 for Stock X, a. what is rX, the required rate of return for Stock X? b. What would rX be if investors expected the inflation rate to increase by 2 percentage points? c. What would rX be if an increase in investors risk aversion caused the market risk premium to increase by 3 percentage points? rRF remains at 5 percent. d. What would kX be if investors expected the inflation rate to increase by 2 percentage points and their risk aversion increased by 3 percentage points?

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