The Security Market Line (SML) Relates Risk to Return, for a Given

question 4

Multiple Choice

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?

• A) The market risk premium would increase.
• B) Beta would increase.
• C) The slope of the SML would increase.
• D) The SML line would shift up.

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Definitions:

Group Therapy

A therapeutic approach where several patients meet regularly to discuss and explore their issues with each other, facilitated by a therapist.

Quasi-Therapists

Individuals who may not have formal therapeutic training but provide support, guidance, or counseling in a therapeutic-like manner.

Group Members

Individuals who are part of a collective or team, sharing common goals, tasks, or interests within the group.

Rational-emotive Behavior Therapy

A form of psychotherapy that identifies irrational beliefs, challenges these beliefs, and encourages the adoption of more rational and realistic thinking.