Suppose IRF = 4%, M = 10%, and b; = 1.8. a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose of increases to 5%. The slope of the SML remains constant. How would this affect rm and n? 1. Both rm and will decrease by 1 percentage point. II. Both rm and r will remain the same. III. Both rm and i will increase by 1 percentage point. IV. I will remain the same and will increase by 1 percentage point. V. rm will increase by 1 percentage point and i will remain the same. -Select 2. Now suppose ref decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and n will decrease by 1 percentage point. II. I will decrease by 1 percentage point and r will remain the same. III. I will remain the same and r; will decrease by 1 percentage point. IV. Both rm and i will increase by 1 percentage point. V. Both rm and i will remain the same. -Select- c. 1. Now assume that ref remains at 4%, but rm increases to 11%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new ri will be %. 2. Now assume that ref remains at 4%, but im falls to 9%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new ri will be %