Expected inflation rate


Problem: Other things held constant, if the expected inflation rate decreases and investors also become more risk averse, the Security Market Line would shift in this manner:

A. Down and have a steeper slope.

B. Up and have a less steep slope.

C. Up and keep the same slope.

D. Down and keep the same slope.

E. Down and have a less steep slope.

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Finance Basics: Expected inflation rate
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