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The security market line (SML) relates risk to return, for a given set of market conditions. If expected inflation increases, which of the following would

The security market line (SML) relates risk to return, for a given set of market conditions. If expected inflation increases, which of the following would most likely occur?

The market risk premium would increase.

Beta would increase.

The slope of the SML would increase.

The SML line would shift up.

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