Question: Tool tip: Mouse over the points on the graph to see their coordinates. 20 REQUIRED RATE OF RETURN (Percent) of New SML 08 2 0.4

Tool tip: Mouse over the points on the graph to see their coordinates. 20 REQUIRED RATE OF RETURN (Percent) of New SML 08 2 0.4 1.2 1.0 2.0 RISK (Beta) 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? O The risk-free rate will decrease. The risk-free rate will remain constant. The risk-free rate will increase

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