Suppose that Federal Reserve actions have caused an increase in the risk-free rate, rRF. Meanwhile, investors are afraid of a recession, so the market risk premium, (rM? rRF), has increased. Under these conditions, with other things held constant, which of the following statements is most correct?
A. The required return on all stocks would increase, but the increase would be greatest for stocks with betas of less than 1.0.
B. Stocks' required returns would change, but so would expected returns, and the result would be no change in stocks' prices.
C. The prices of all stocks would decline, but the decline would be greatest for high-beta stocks.
D. The prices of all stocks would increase, but the increase would be greatest for high-beta stocks.
E. The required return on all stocks would increase by the same amount.
Answer: C
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The immigration laws of the United States are administered by the U.S. Citizenship and Immigration Services
Indicate whether the statement is true or false
All of the following may influence demand and should be considered when developing a forecast except?
a. Economic conditions b. New competition c. Supplier quality d. Emerging markets
An auditor compares annual revenues and expenses with similar amounts from the prior year and investigates all changes exceeding 10%. This procedure most likely could indicate that:
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