ES eBook Problem Walk-Through Suppose tre = 6%, rm = 9%, and b; = 1.4. 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 n? I. Both rm and r will decrease by 1 percentage point. II. Both rm and will remain the same. III. Both rm and n will increase by 1 percentage point. IV. rm will remain the same and will increase by 1 percentage point. V. rm will increase by 1 percentage point and n will remain the same. -Select- 2. Now suppose tre decreases to 5%. The slope of the SML remains constant. How would this affect rm and r? I. Both rm and i will remain the same. II. Both rm and n will decrease by 1 percentage point. III. rm will decrease by 1 percentage point and i will remain the same. IV. rm will remain the same and will decrease by 1 percentage point. V. Both rm and n will increase by 1 percentage point. -Select- c. 1. Now assume that ref remains at 6%, but rm increases to 10%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new r will be %. 2. Now assume that the remains at 6%, but rm falls to 8%. The slope of the SML does not remain constant. How would these changes affect m? Round your answer to one decimal place. The new n will be %