Assume that investors have recently become more risk averse, so the market risk premium has increased. also, assume that the risk-free rate and expected inflation have not changed. which of the following is most likely to occur? a. the required rate of return on the market, rm, will not change as a result of these changes. b. the required rate of return will decline for stocks whose betas are less than 1.0. c. the required rate of return for an average stock will increase by an amount equal to the increase in the market risk premium. d. the required rate of return on a riskless bond will decline.

The stock of grommet corporation, a u.s. company, is publicly traded, with no single shareholder owning more than 5 percent of its outstanding stock. grommet owns 95 percent of the outstanding stock of staple inc., also a u.s. company. staple owns 100 percent of the outstanding stock of clip corporation, a canadian company. grommet and clip each own 50 percent of the outstanding stock of fastener inc., a u.s. company. grommet and staple each own 50 percent of the outstanding stock of binder corporation, a u.s. company. which of these corporations form an affiliated group eligible to file a consolidated tax return?