Problem 8-12 Required rate of return Suppose RF = 8%, IM = 9%, and b; = 1.8. a. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. % b. Now suppose rrf increases to 9%. The slope of the SML remains constant. How would this affect rm and ri? I. Both rm and r; will remain the same. II. Both rm and r; will increase by 1%. III. rm will remain the same and i will increase by 1%. IV. I'm will increase by 1% and ri will remain the same. V. Both rm and r; will decrease by 1%. -Select- v c. Now suppose IRF decreases to 7%. The slope of the SML remains constant. How would this affect rm and ri? I. rm will remain the same and r; will decrease by 1%. II. Both rm and r; will increase by 1%. III. Both rm and ri will remain the same. IV. Both rm and ri will decrease by 1%. V. rm will decrease by 1% and ri will remain the same. -Select- v d. Now assume that ref remains at 8% but rm increases to 10%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new r; will be % e. Now assume that ref remains at 8% but rm falls to 8%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new ri will be