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-7 Suppose rRF = 9%, rM = 14%, and bi = 1.3. ‘ a. What is ri, the required ra

-7 Suppose rRF = 9%, rM = 14%, and bi = 1.3. ‘ a. What is ri, the required ra

-7 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% or (2) decreases to
8%. The slope of the SML remains constant. How would this affect rM and ri?

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