1. What impact would the following changes have on the security market line and therefore on the required return for a given level of risk? (a) an increase in inflationary expectations, (b0 Investors become less risk-averse.
2. Explain two ways the Federal Reserve could raise the Federal Funds Rate without changing the Money supply?
3. Explain what capital budgeting is and what must be considered when making a capital budgeting decision.