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Business, 12.11.2019 04:31 Jazmineboo5818

Which of the following statements is correct? (assume that the risk-free rate is a constant.)a. if the market risk premium increases by 1%, then the required return will increase for stocks that have a beta greater than 1.0, but it will decrease for stocks that have a beta less than 1.0.b. the effect of a change in the market risk premium depends on the level of the risk-free rate. c. the effect of a change in the market risk premium depends on the slope of the yield curve. d. if the market risk premium increases by 1%, then the required return on all stocks will rise by 1%.e. if the market risk premium increases by 1%, then the required return will increase by 1% for a stock that has a beta of 1.0.

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