11. Problem 8.12 (Required Rate of Return) Problem Walk-Through eBook 11 Suppose TRF = 4%, r = 9%, and b1 = 1.7. a. What is n, the required rate of return on Stock I? Round your answer to two decimal places. % b. 1. Now suppose rrf increases to 5%. The slope of the SML remains constant. How would this affect rm and n? 1. Both rm and will decrease by 1%. II. Both rm and n will remain the same. 111. Both rm and n will increase by 1%. IV. I will remain the same and n will increase by 1%. V. rm will increase by 1% and n will remain the same Select 2. Now suppose rri decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? I. Bothm and will decrease by 1%. 11. I will decrease by 1% and n will remain the same. III. I will remain the same and will decrease by 1%. IV. Both rm and will increase by 1%, V. I will increase by 1% and will remain the same. -Select 2. Now suppose TRF decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? I. Both rand n will decrease by 1%. II. I will decrease by 1% and n will remain the same. III. T will remain the same and will decrease by 1%. IV. Both rand n will increase by 1%. V. Both rm and n will remain the same. Select C. 1. Now assume that the remains at 4%, but to increases to 10%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be 9. 2. Now assume that for remains at 4%, but I falls to 8%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be %