Question: Chapter 8 Assignment 20 16 New SML 12 REQUIRED RATE OF RETURN (Percent) 0 U 0 0 0.4 > 2.0 1.6 0.8 1.2 RISK (Beta)

Chapter 8 Assignment 20 16 New SML 12 REQUIRED RATE OF RETURN (Percent) 0 U 0 0 0.4 > 2.0 1.6 0.8 1.2 RISK (Beta) The SML helps determine the risk-aversion level among investors. The steeper the slope Which of the following statements best describes a shift in the SML caused by increased The risk-free rate will remain constant. The risk-free rate will decrease. 12 0 5 U REQUIRED RATE OF RETURN (P 0 04 06 12 RISK (Beta) 16 20 The SML helps determine the risk-aversion level among investors. The steeper the slope of the SML, the higher the level of risk aversion Which of the following statements best describes a shift in the SML caused by increased risk aversion? The risk-free rate will remain constant. The risk-free rate will decrease. The risk-free rate will increase

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