A decrease in the market risk premium,all other things constant,will cause the security market line to
A) Shift up
B) Shift down
C) Have a steeper slope
D) Have a flatter slope
E) Remain unchanged

Question

Quizplus · Accepted Answer

A decrease in the market risk premium will result in a flatter slope of the security market line, as the risk-return tradeoff becomes less pronounced.

A Decrease in the Market Risk Premium,all Other Things Constant,will