5. Changes to the security market line The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows: An anslyst believes that infution in going to increase by 2.0% evet the nest yeoc, While the market risk peemium wili be unchanged. The analyst uset the Capital Atset Pricing Mosel (CABM). The feliowing groph plots the ourieet SML. s nalyster predictiton. Hapey Comis new recusired rethe ef return it foci top: Mouse over the points en the graph ta tes their coordinates. Tool tip: Mouse over the points on the graph to see their coordinates. The 5 ML heips determine the level of risk aversion among investors, The steeper the slope of the SML. the the level of risk aversion. The sML helps determine the level of risk aversion among investors. The steeper the slope of the SML, the the level of risk averslon. Which kind of stock is most affected by changes in risk aversion? (In other words, which stocks see the biggest change in their required returns?) Medium-beth stocks All stocks affected the same, regardiess of beta High-beta stocks Low-beta stocks