eBook Problem Walk-Through Suppose IRF = 6%, I'm = 12%, and b; = 1.1. a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rrf increases to 7%. The slope of the SML remains constant. How would this affect rm and r? I. Both rm and r; will decrease by 1 percentage point. II. Both rm and r, will remain the same. III. Both rm and r, will increase by 1 percentage point. IV. rm will remain the same and r; will increase by 1 percentage point. V. rm will increase by 1 percentage point and will remain the same. -Select- 2. Now suppose of decreases to 5%. The slope of the SML remains constant. How would this affect rm and ri? I. rm will remain the same and ri will decrease by 1 percentage point. II. Both rm and r; will increase by 1 percentage point. III. Both rm and r will remain the same. IV. Both rm and will decrease by 1 percentage point. V. rm will decrease by 1 percentage point and r; will remain the same. -Select- c. 1. Now assume that ree remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant. How would these changes affect r? Round your answer to one decimal place. The new ri will be %. 2. Now assume that rrr remains at 6%, but rm falls to 11%. The slope of the SML does not remain constant. How would these changes affect r;? Round your answer to one decimal place. The new r will be %