Q Search this cou Ch 08: End-of-Chapter Problems - Risk and Rates of Return Suppose TRF = 8%, IM = 13%, and b; = 1.9. a. What is ri, the required rate of return on Stock I? Round your answer to two decimal places, % b. 1. Now suppose rrf increases to 9%. The slope of the SML remains constant. How would this affect rm and n? 1. Both rm and will remain the same. II. Both rm and i will increase by 1%. III. I will remain the same and n will increase by 1%. IV. I will increase by 1% and will remain the same. V. Both rm and will decrease by 1%. -Select- 2. Now suppose of decreases to 7%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and n will decrease by 1%. II. I will decrease by 1% and i will remain the same. III. Im will remain the same and n will decrease by 1%. IV. Both rm and will increase by 1%. V. Both rm and i will remain the same. -Select- c. 1. Now assume that rre remains at 8%, but r increases to 14%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be % 2. Now assume that ree remains at 8%, but rm falls to 12%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be %