Attempts Average/5 12. Problem 8.12 (Required Rate of Return) look Problem Walk-Through Suppose rar - 3%, 9%, and bi - 1.6. a. What is n, the required rate of return on Stock I? Round your answer to one decimal place. % b. 1. Now suppose rar increases to 4%. The slope of the SML remains constant. How would this affect FM and n? 1. Both and n will remain the same. 11. Both and will increase by 1 percentage point. III. I will remain the same and will increase by 1 percentage point. IV. " will increase by 1 percentage point and I will remain the same. V. Both and will decrease by 1 percentage point Select 2. Now suppose to decreases to 2%. The slope of the SML remains constant. How would this affect and n? 1. Both and will decrease by 1 percentage point II. T will decrease by 1 percentage point and n will remain the same. III. will remain the same and will decrease by 1 percentage point. IV. Both and n will increase by 1 percentage point. V. Both rand n will remain the same. c. 1. Now assume that ree remains at 3%, but ru increases to 10%. The slope of the SME does not remain constant. How would these changes affect n Round your answer to one decimal place The new i will be 2. Now assume that has remain at 3%, but ru falls to 8%. The slope of the SML does not remain constant. How would these changes affect ? Round your answer to one decimal place. The new will be