7 Explain how you would expect each of the following events to affect the security market line...

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7 Explain how you would expect each of the following events to affect the security market line and the required rate of return on a given share

(imagine that each event occurs independently of the others):

(a) an increase in official short-term interest rates;

(b) a reduction in the degree of risk aversion in the market;

(c) an increase in the uncertainty of the share’s future prospects.

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