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  3. suppose tre = 5%, r = 11%, and b = 1.1. a. what is

Suppose tre = 5%, r = 11%, and b = 1.1. a. What is, the...

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Accounting

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Suppose tre = 5%, r = 11%, and b = 1.1. a. What is, the required rate of return on Stock 17 Round your answer to two decimal places. % b. 1. Now suppose rar increases to 6%. The slope of the SML remains constant. How would this affect rand ? I. Both and will decrease by 1%. 11. Both and will remain the same. 111. Both and will increase by 1%. IV. will remain the same and will increase by 1% V. will increase by 1% and n will remain the same. -Select- 2. Now suppose a decreases to 4%. The slope of the SML remains constant. How would this affect ny and n? 1. Both and will decrease by 1%. II. T will decrease by 1% and n will remain the same. III. Te will remain the same and will decrease by 1%. IV. Both TM and n will increase by 1%. V. Both and will remain the same c. 1. Now assume that Tu remains at 5%, but ry Increases to 12%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be 2. Now assume that remains at 5%, but mu falis to 10%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places The new will be %

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