i have completed most of the problem. i would like the last mutiple choice question to be answered as well as how to graph the new SML. added pictures of all of the previous infor in the problem so its easier to understand the problem.

11. 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: 1.2, 10.4 Feturn on HC's Stock REQUIRED RATE OF RETURN (Percent) 20.0 16.0 1.2, 10.4 Return on HC's Stock REQUIRED RATE OF RETURN (Percent) 1.0 RISK (Beta) Slope: 4.50 Y-Intercept: 5 Return on HC's Stock REQUIRED RATE OF RETURN (Percent) 0.5 1.0 RISK (Beta) CAPM Elements Value 5.0% 4.5% Risk-free rate (TRF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock 1.2 10.4% An analyst believes that inflation is going to increase by 2.0% over the next year, while the market risk premium will be unchanged. The analyst uses the Capital Asset Pricing Model (CAPM). The following graph plots the current SML Calculate Happy Corp.'s new required return. Then, on the graph, use the green points (rectangle symbols) to plot the new SML suggested by this analyst's prediction. Happy Corp.'s new required rate of return is 12.4% New SML REQUIRED RATE OF RETURN (Percent) 08 16 12 RISK (Beta) The SML helps determine the risk-aversion level among investors. The steeper the slope of the SML, the higher the level of risk aversion Which of the following statements best describes the shape of the SML if investors were not at all risk averse? New SML REQUIRED RATE OF RETURN (Percent) 1.6 - 12 RISK (Beta) The SML helps determine the risk-aversion level among investors. The steeper the slope of the SML, the higher the level of risk aversion. Which of the following statements best describes the shape of the SML if investors were not at all risk averse? The SML helps determine the risk-aversion level among investors. The steeper the slope of the SML, the higher the level of risk aversion. Which of the following statements best describes the shape of the SML if investors were not at all risk averse? The SML would have a positive slope, but the slope would be steeper than it would be if investors were risk averse. The SML would have a negative slope. The SML would have a positive slope, but the slope would be flatter than it would be if investors were risk averse. The SML would be a horizontal line. Grade It Now Save & Continue Continue without savin