What would happen to the SML if the inflation rate increased? The:

[prabhashverma]

What would happen to the SML if the inflation rate increased? The:
Kaplan says SML moves up?? Do you guys agree?
I thought high inflation means less risk adjusted return to SML should move down but answer shown is otherwiese.

 

[Dsylexic]

risk free rate goes up with inflation,so SML shifts up

 

[dinesh.sundrani]

INFL - UP —> RFR - UP and SML –> UP

 

[prabhashverma]

Okie
Thanks………..