If all investors become more less risk-averse, the SML will _______ and stock required returns will .

Business

1 answer:

zmey [24]3 years ago

6 0

Answer:

Option B, have the same intercept with a flatter slope; fall.

Explanation:

Option B is correct because a more risk-averse person faces a steeper curve while the less risk-averse person faces a flatter slope. While the more risk-averse person has more return on the stock while the less risk-averse person has less return. Therefore, in the given situation, the SML will have the flatter slope and its return will fall. As it is a less risk-averse investor.

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If all investors become more less risk-averse, the SML will _______________ and stock required returns will ________.

If all investors become more less risk-averse, the SML will _______ and stock required returns will .