Question: What will happen to the expected return on a stock with a beta of 1.5 and a market risk premium of 9% if the Treasury

What will happen to the expected return on a stock with a beta of 1.5 and a market risk premium of 9% if the Treasury bill yield increases from 3% to 5%?

The expected return will remain unchanged.

The expected return will increase by 1.0%.

The expected return will increase by 2.0%.

The expected return will increase by 3.0%.

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