Other things held constant, if the expected inflation rate increases and investors also become less risk averse, the Security Market Line would be affected as follows A The SML would be affected only if betas changed B The x axis intercept would decline, and the slope would increase C The y axis intercept would decline, and the slope would increase D Both the y axis intercept and the slope would increase, leading to higher required returns E The y axis intercept would increase, and the slope would decline

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Question: Other things held constant, if the expected inflation rate increases and investors also become less risk averse, the Security Market Line would be affected as

Other things held constant, if the expected inflation rate increases and investors also become less risk averse, the Security Market Line would be affected as follows:

	A	The SML would be affected only if betas changed.
	B	The x-axis intercept would decline, and the slope would increase.
	C	The y-axis intercept would decline, and the slope would increase.
	D	Both the y-axis intercept and the slope would increase, leading to higher required returns.
	E	The y-axis intercept would increase, and the slope would decline.

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