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Which of the following is a true statement about risk aversion and the SML? Multiple Choice The SML does not reflect risk aversion because it
Which of the following is a true statement about risk aversion and the SML? Multiple Choice The SML does not reflect risk aversion because it only recognizes systematic risk. The level of aggregate risk aversion in the market determines the intercept of the SML. Aggregate risk aversion determines and individual risk aversion determines the security risk premium. Aggregate risk aversion determines the slope of the SML and individual risk aversion determines where investors choose to invest along the SML
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