30) What happens to the expected portfolio return if the portfolio beta increases from 1.0 to 1.5, the risk-free rate decreases from 3 to 2%, and the market risk premium decreases from 9 to 8%? A) It increases from 12% to 14%. B) It remains constant C) It increases from 9% to 11%. D) It decreases from 9% to 7%. 31) What would you recommend to an investor who is considering an investment that plots below the security market line, and why? A) Don't invest; All stocks below the SML are low-growth stocks. B) Don't-invest; The risk is high relative to the expected return. C) Invest; All stocks revert to the SML over time. D) Invest; The expected return is high relative to the risk. 32) If the slope of the security market line decreases, then this indicates that A) Investors' risk aversion decreased. B) The risk-free rate decreased. C) Inflation is expected to be higher. D) The market risk premium has increased 33) A portfolio consists of an index mutual fund which represents the overall market and Treasury bills. The fund has a portfolio weight of 30%. The risk-free rate is 2.2% and the market risk premium is 9.6%. What is your best estimate of the portfolio expected rate of return? C. 11.80% B.4.4296 D. 3.54% A5.08%