Which of the following changes would not lead to an increase in a security's required return? An increase in
A)the market risk premium.
B)risk-free rate.
C)the security's beta.
D)the security's random risk.

Question

Quizplus · Accepted Answer

Increase in the security's random risk would not necessarily lead to an increase in the security's required return, as the required return is based on systematic risk (beta) rather than random risk (idiosyncratic risk).

Which of the Following Changes Would Not Lead to an Increase