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B % eBook Problem Walk-Through Suppose nv - 6%, (M = 11%, and b = 1.3. a. What is the required rate of return on Stock i? Round your answer to one decimal place. b. 1. Now suppose rer increases to 7%. The slope of the SML remains constant. How would this affect rm and n? 1. TM will increase by 1 percentage point and n will remain the same. II. Bothm and will decrease by 1 percentage point 111. Both and will remain the same. IV. Both and will increase by 1 percentage point V. nu will remain the same and will increase by 1 percentage point. Select 2. Now suppose u decreases to 5%. The slope of the SML remains constant. How would this affect and n? 1. will decrease by 1 percentage point and will remain the same II. M will remain the same and will decrease by 1 percentage point III. Both and will increase by 1 percentage point IV. Both and will remain the same. V. Both and n will decrease by 1 percentage point. Select c. 1. Now assume that remains at 6%, but increases to 12%. The slope of the SML does not remain constant. How would these changes affect o? Round your answer to one decimal place The new will be 2. Now assume that rar remains at 6%, but ru falls to 10%. The slope of the SML does not remain constant. How would these changes affect 117 Round your answer to one decimal place. The new n will be %