Question: Suppose rRF = 5%, rM = 10%, and bi = 0.750. a. What is ri, the required rate of return on Stock i? b. Now

Suppose rRF = 5%, rM = 10%, and bi = 0.750. a. What is ri, the required rate of return on Stock i? b. Now suppose that rRF increases to 6% and the slope of the SML remains constant. Recalculate ri? c. Now assume that rRF remains at 5% but rM falls to 8%. The slope of the SML does not remain constant. Recalculate ri? Question 9 options: a)8.750%; b)9.750%; c)7.250% a)12.500%; b)9.750%; c)6.950% a)8.750%; b)9.000%; c)7.250 a)8.250%; b)9.750%; c)7.300%

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