Essay
Suppose the SML has a risk-free rate of 5 percent and an expected market return of 15 percent.Now suppose that the SML shifts,changing slope,so that kRF is still 5 percent but kM is now 16 percent.What does this shift suggest about investors' risk aversion? If the slope were to change downward,what would that suggest?
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Suggest that investors are more averse t...View Answer
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