10. Problem 8.12 (Required Rate of Return) eBook Problem Walk-Through Suppose rrr = 3%, M = 12%, and b = 1.7. a. What is the required rate of return on Stock I? Round your answer to one decimal place. % b. 1. Now suppose the increases to 4%. The slope of the SML remains constant. How would this affect rm and n? I. Both and will increase by 1 percentage point. II. will remain the same and n will increase by 1 percentage point. III. will increase by 1 percentage point and will remain the same IV. Both and will decrease by 1 percentage point. V. Both and will remain the same. 1-Select- ory 2. Now suppose u decreases to 2%. The slope of the SML remains constant. How would this affect and n? Im will remain the same and will decrease by 1 percentage point. 11. Both rand n will increase by 1 percentage point. it. Both rm and n will remain the same IV. Both and will decrease by 1 percentage point. V. T will decrease by 1 percentage point and I will remain the same c. 1. Now assume that re remains at 3%, but increases to 13%. The slope of the SML does not remain constant. How would these changes affect ? Round your answer to one decimal place, The new n will be %. 2. Now assume that for remains at 3%, but ne falis to 11%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new n will be %