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A Reduction in the Willingness of Investors to Take on Risk

Question 60

Multiple Choice

A reduction in the willingness of investors to take on risk would have what effect on the Security Market Line (CAPM) ?


A) No effect
B) Rotate the SML counter clockwise around the risk-free rate
C) Rotate the SML clockwise around the risk-free rate
D) Shift the SML upward,parallel to its previous location

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