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Suppose rrf 9 rm 14 and bi 13nbspa what is ri the

Suppose rRF = 9%, rM = 14%, and bi = 1.3.
a. What is ri, the required rate of return on Stock i?
b. Now suppose rRF (1) increases to 10 percent or (2) decreases to 8 percent.
The slope of the SML remains constant. How would this affect rM and ri?
c. Now assume rRF remains at 9 percent but rM (1) increases to 16 percent or (2) falls to 13 percent. The slope of the SML does not remain constant. How would these changes affect ri?

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Finance Basics: Suppose rrf 9 rm 14 and bi 13nbspa what is ri the

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