eBook Problem Walk-Through Suppose = 3% = 10%, and b = 1.4 a. What is, the required rate of return on Stock I? Round your answer to one decimal place. b. 1. Now suppose ru increases to 4%. The slope of the SML remains constant. How would this affect and n? 1. Both and will decrease by 1 percentage point. 11. Both and will remain the same. III. Both and will increase by 1 percentage point. IV. 1 will remain the same and will increase by 1 percentage point. V. Te will increase by 1 percentage point and n will remain the same. 2. Now suppose to decreases to 2%. The slope of the SML remains constant. How would this affect and ? 1. Both and will increase by 1 percentage point 11. Both and will remain the same II. Both and will decrease by 1 percentage point. IV. T will decrease by 1 percentage point and I will remain the same. V. T will remain the same and will decrease by 1 percentage point c. 1. Now assume that 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 one decimal place. The new will be 2. Now assume that has remains at 3%, but ne falls to 9%. The slope of the SML does not remain constant. How would these changes affect Round your answer to one decimal place. The new n wil be