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QUESTION 2 5 We derived the CAPM equation using a basic line chart of risk vs reward If investor's become more risk averse, what happens

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25

We derived the CAPM equation using a basic line chart of risk vs reward If investor's become more risk averse, what happens to the slope of the line?

.

It flattens out, the slope is reduced

.

There is no impact to the line

0 .

The line becomes steeper, the slope increases

.

It depends on the risk free rate

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