8. 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? (Points : 1) The market risk premium would increase. Beta would increase. The slope of the SML would increase. The required return of an average stock, rA = rM, would increase. None of the indicated changes would be likely to occur. 9. According to the following information, which of the stocks would be considered riskiest in a diversified portfolio of investments? (Points : 1) Stock MNO, because it has the highest standard deviation. Stock TUV, because it has the highest beta. Stock FGH, because it has the highest s/b ratio Stock ABC, because its eta is the same as the market beta (1.0) and the market is always very, very risky. 10. According to the capital asset pricing model, which of the following stocks should have the highest required rate of return? (Points : 1) Beta Electronics because its standard deviation is highest. Alpha Automobiles because its beta coefficient is highest. Omega foods because the ration of standard deviation/beta is the lowest. Not enough information is given to answer this