The following graph plots the current Security Market Line (SML) and indicates the retum that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows. REQUIRED RATE OF RETURN Percent 20.0 12.0 Return on HC's Stodk 0.0 0.5 1.0 1.5 2.0 RISK (Betal CAPM Elements Value Risk-free rate (rR) Market risk premium (RPN) Happy Corp. stock's beta Required rate of retum on Happy Corp. stock An analyst believes that inflation is going to increase by 3.0% over the next year, while the arket 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 retum. Then, on the graph, plot the new SML suggested by this analyst's Happy Corp.'s new required rate of retum is Tool tip: Mouse over the points on the graph to see their coordinates. REQUIRED RATE OF RETURN Percent 20 New SNL 18 0.0 04 0.8 16 2.0 RISK (Betal The SML helps determine the level of risk aversion among investors. The steeper the slope of the SML, the the level of risk aversion. which kind of stock is most affected by changes in risk aversion? (In other words, which stocks see the biggest change in their required retums?) O High-beta stocks O Medium-beta stocks O All stocks are affected the same, regardless of beta Low-beta stocks