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Question 4 and 5 please and thank you! The Security Market Line (SML) plots the risk of individual stocks and that stock's expected rate of

Question 4 and 5 please and thank you! image text in transcribed
The Security Market Line (SML) plots the risk of individual stocks and that stock's expected rate of return. If investors expect the inflation rate to increase, which of the following changes would occur? The Security Market Line (SML) will become flatter An increase in the expected returns of all stocks. A decrease in the risk-free rate A decrease in the beta of each stock Adecrease in the standard deviation of each stock D Question 5 1 pts According to the Capital Asset Pricing Model (CAPM), which of the following risks is most relevant for a stock portfolio? Market risk Inflation risk Firm specifiche Bankruptcy is Diversifable

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