The foloning raph plets the current security market bse (SML) and indicates the return that...

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The foloning raph plets the current security market bse (SML) and indicates the return that investors belding stock from Happy Cerp. (HC). Based on the graphty complete bhe table thst folows equire | 3.A, g.1, 4.6, 59 % Maspy Corp. stock's beta Required rane of rebum on Happy Corpck 110.4, lao, 9A,8.8% An analyst believes that inflation is going to increase by 2.0% over the next year, whee market risk be unchanged. The analysit uses the Capital Asset Pricing Model (CAPM). The ollowing graph plots the oument SL Caiculate Happy Corp 's new requined retum. Then, on the graph, use the green points (rectangle symbols) to pioe che new SML sugpested by this analyst's prediction Happy Corp.'snew resured rate of return is Tool tp: Mouse over the points on the gragh to see their coondinates EQUIRD RATE RETURN IPercent .0,40 y intercept 00 0412 1420 The SAL determine the leval of risk ma-aversion leve, among investors. The natter the slope of the SL, the aversion. Which of the folowing statements best desoribes the shape of the SML if investors were not at all risk averse? O The SML would have a postive slope, but the slope would be steeper than it would be if investors were risk The SML would have negative slope. Q The SML would have a posit ve slope, but the slope mould be flatter than wold be if itestes were risk O The SML wouid be a horizontal line

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