12. Problem 8.12 Click here to read the eBook: The Relationship between Risk and Rates of Return Problem Walk Through REQUIRED RATE OF RETURN Suppose TRF = 3%, CM = 10%, and bi- 1.5. a. What is n, the required rate of return on Stock i7 Round your answer to two decimal places. b. 1. Now suppose nur increases to 4%. The slope of the Siremains constant. How would this affect man and n? 1. Both rm and will remain the same. 11. Both and will increase by 1% III. I will remain the same and will increase by 1%. IV. I will increase by 1% and i will remain the same, V. Both rm and will decrease by 1% Select 2. Now suppose rre decreases to 2%. The slope of the SML remains constant. How would this alfect im and 2 I. I will remain the same and n will decrease by 1 II. Both ry and will increase by 1%. m. Both rm and n will remain the same IV. Hoth rm and will decrease by 1%. V. Im will decrease by 1% and i will remain the same -Select- v f. 1. Now assume that the remains at 3%, but increases to 11%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new r, will be 2. Now assume that re remains at 3%, but falls to 9%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new will be