Posted: September 26th, 2016

which of the following is correct? (assume that the risk free rate is a constant)

)which of the following is correct? (assume that the risk free rate is a constant)

A) if the market risk is premium increases by 1%, then the required return will increase for stocks that have a beta greater than 1.0

B) the effect of a change in the market risk premium depends on the slope of the yield curve.

C) If the market risk premium increases by 1% then the required return on all stock will rise by 1%

D) if the market risk premium increases by 1% then the required return will increase by 1% then the required return will increase by 1% for the stock that has a beta of 1.0

E) the effect of a change on the market risk premium depends on the level of the risk free rate.