7. Problem 8.12 (Required Rate of Return) eBook Problem Walk-Through Supposera = 6%, H = 9%, and b = 1.4. a. What is the required rate of return on Stock 17 Round your answer to one decimal place. % b. 1. Now suppose pas increases to 7%. The slope of the SML remains constant. How would this affect and r? I. 14 will increase by 1 percentage point and n will remain the same 11. Both and will decrease by 1 percentage point. III. Both and will remain the same IV. Both and will increase by 1 percentage point. V. nu will remain the same and I will increase by 1 percentage point. 2. Now suppose or decreases to 5%. The slope of the SML remains constant. How would this affect and n? I. will decrease by 1 percentage point and will remain the same. II. T will remain the same and will decrease by 1 percentage point. III. Both and will increase by 1 percentage point. IV. Both rand will remain the same. V. Both and will decrease by 1 percentage point. c. 1. Now assume that has remains at 6%, but increases to 10%. The slope of the SML does not remain constant. How would these changes affect 17 Round your answer to one decimal place. The new will be 2. Now assume that remains at 6%, but falls to 8%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new will be