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What Will Happen to the Security Market Line (SML)if the Following

Question 66

Multiple Choice

What will happen to the security market line (SML) if the following events occur,other things constant: (1) inflation expectations increase,and (2) investors become more risk averse?


A) Shift up and keep the same slope
B) Shift up and have less slope
C) Shift up and have a steeper slope
D) Shift down and keep the same slope
E) Shift down and have less slope

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