Based on the diagram presented below, which of the following statements correctl

Question

Based on the diagram presented below, which of the following statements correctly describes the difference between SML and SML1? There has been an overall increase In the level of risk aversion resulting in higher required returns for each risk level. There has been an overall decrease in the level of risk aversion causing a decline in the required return at each level of risk. There is an expectation of Increased inflation causing an increase in the rate of return of all investments. There is an expectation of decreased inflation causing an increase in the rate of return of all investments.

Explanation / Answer

answer : c
there is an expected increased inflation causing an increase in the rate of return of all
investment

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