(Please use a math, finance equation and/ or formula. DONT USE A SHEET CHART, EXCEL, OR GRAPH)

8) Suppose the R_rf = 5%, R_m = 11%, and b_i = 1.1. If the risk-free rate decreases by 1%, but the slope of the security market line remains the same, what will be the new required return for this company?

11.3%

10.8%

10.6%

11.1%

11.5%