If the price of money (e.g., interest rates and equity capital costs) increases due to an increase in anticipated inflation, the

Question

2 years ago

12

If the price of money (e.g., interest rates and equity capital costs) increases due to an increase in anticipated inflation, the

risk-free rate will also increase. If there is no change in investors' risk aversion, then the market risk premium (rM - rRF) will remain constant. Also, if there is no change in stocks' betas, then the required rate of return on each stock as measured by the CAPM will increase by the same amount as the increase in expected inflation.
a) true
b) false

Business

1 answer:

goldenfox [79] · Answer 1 · 2022-08-25T11:29:52+03:00

goldenfox [79]2 years ago

7 0

It may be true but double check