need help doing the New SML line on the graph

Ch 08: Assignment - Risk and Rates of Return The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows: REQURED RATE OF RETURN(Percent) m elum on HC's Stock RISK (Beta) Value 2.09 CAPM Elements Risk-free rate ( ) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock 6.09 1.0 8.0% An analyst believes that inflation is going to increase by 3,0% over the next year, while the market risk premium will be unchanged. The analyst uses the Capital Asset Pricing Model (CAPM). The following graph plots the current SML. Calculate Happy Corp's new required return. Then, on the graph, use the green points (rectangle symbols) to plot the new SML suggeded by this analyst's prediction. Happy Corp.'s new required rate of return is 11.0% ary Tooltip: Mouse over the points on the graph to see their coordinates. Ch 08: Assignment - Risk and Rates of Return New SML REQUIRED RATE OF RETURN(Percent) RISK (Beta) Luctory 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 hit in the SML caused by increased risk version? The risk-free rate will remain constant The risk-free rate will increase