What Will Happen to the Security Market Line (SML) If

question 12

Multiple Choice

What will happen to the security market line (SML) if the following events occur, other things constant: (1) inflation expectations increase, and (2) investors become more risk averse?

• A) shift up and keep the same slope
• B) shift up and have less slope
• C) shift up and have a steeper slope
• D) shift down and keep the same slope
• E) shift down and have less slope

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Definitions:

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Systems Approach

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Biopsychosocial Model

A model of health that integrates the biological, psychological, and social factors all playing a role in human functioning.

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