equal-amounts invested in each-of the three stocks. Each-of the-stocks-has-a-standard-deviation-of25%. The returns on the three-stocks are independent of one another , e., the correlation. coefficients-all-equal-zero). Assume-that there-is an increase in the market-risk-premium, but the-risk-free-rateremains unchanged. Which-of the following-statements is-CORRECT79
o-> The-required-return-of-all-stocks-will-remain-unchanged-since-there-was-no-change-in-theirbetas. 1
o-> The-required-return-on-Stock-Awill-increase-by-less than-the-increase-in-the-market-riskpremium, while the-required-return-on-Stock-C-will-increase-by-more-than-the-increase-inthe market risk-premium. uarr
o-> The-required-return-on the average-stpck-will-remain-unchanged, but the-returns-of-riskier-stocks-(such-as-Stock-C)-will-increast-while-thereturns-of-safer-stocks-(such-as-Stock-A)-will-decrease. uarr
o-> The-required-returns on-all-three-stocks-willincrease by the amount of the increase in the-market-risk-premium. uarr
o -> The-required-return-on-the-average-stock-will-remain-unchanged,-but-the-returns-on-riskier-stocks-(such-as-Stock-C) will-decrease-while-the-returns-on-safer-stocks-(such-as-Stock-A). will-increase. uarr
