If investors become less averse to risk, the slope of the Security Market Line (SML) will increase.

Name: If investors become less averse to risk, the slope of the Security Market Line (SML) will increase.
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Question

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If investors become less averse to risk, the slope of the Security Market Line (SML), which represents the relationship between risk and expected return, will decrease because they will require a lower return for taking on additional risk.

If Investors Become Less Averse to Risk, the Slope of the Security