Question: Suppose 6%, 9%, and b = 1.6. 2. What is, the required rate of return on Stock I? Round your answer to one decimal place.

Suppose 6%, 9%, and b = 1.6. 2. What is, the required rate of return on Stock I? Round your answer to one decimal place. b. 1. Now suppose rar increases to 7%. The slope of the SML remains constant. How would this affect and n? 1. Both and will decrease by 1 percentage point. II. Both and will remain the same. III. Both and will increase by 1 percentage point. IV. I will remain the same and will increase by 1 percentage point. V. 14 will increase by 1 percentage point and will remain the same. -Select- 2. Now suppose ref decreases to 5%. The slope of the SML remains constant. How would this affect rm and n? I. n will decrease by 1 percentage point and n will remain the same. II. I will remain the same and will decrease by 1 percentage point. III. Both and n will increase by 1 percentage point. IV. Both and will remain the same. V. Both rw and will decrease by 1 percentage point. Select C. 1. Now assume that remains at 6%, but increases to 10%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new will be 2. Now assume that rs remains at 6%, but ru falls to 8%. The slope of the SMI. does not remain constant. How would these changes affect n? Round your answer to one decimal place, The new will be %

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