The security market line relates risk to return

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Reference no: EM131063296

The Security Market Line (SML) relates risk to return, for a given set of financial market conditions. If investors conclude that the inflation rate is going to increase, which of the following changes would be most likely to occur?

A. The market risk premium would increase.

B. Beta would increase.

C. The slope of SML would increase.

D. the required return of an average stock, KA=KM would increase.

Reference no: EM131063296

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