eBook Problem Walk-Through Suppose rrr = 3%, r = 10%, and b; = 1.3. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. a b. 1. Now suppose of increases to 4%. The slope of the SML remains constant. How would this affect rm and r? I. Both rm and n will decrease by 1 percentage point. II. Both rm and i will remain the same. III. Both rm and n will increase by 1 percentage point. IV. I will remain the same and r will increase by 1 percentage point. V. rm will increase by 1 percentage point and n will remain the same. -Select- 2. Now suppose rof decreases to 2%. The slope of the SML remains constant. How would this affect rm and n? I. I will remain the same and r; will decrease by 1 percentage point. II. Both rm and r; will increase by 1 percentage point. III. Both rm and ri will remain the same. IV. Both rm and will decrease by 1 percentage point. V. I will decrease by 1 percentage point and will remain the same. -Select- c. 1. Now assume that rrr remains at 3%, but rm 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 n will be %. 2. Now assume that the remains at 3%, but im falls to 9%. The slope of the SML does not remain constant. How would these changes affect r? Round your answer to one decimal place. The new n will be %