Question: Suppose n AF = 6 % ; r _ { M } = 1 0 % and b _ { i } = 1

Suppose n AF =6\%; r_{M}=10% and b_{i}=1.7 a What is n , the required rate of return on Stock i ? Round your answer to one decimal place .% b .1. Now suppose increases to 7%. The slope of the SML remains constant . How would this affect and ? will remain the same and n will increase by percentage point . will increase by 1 percentage point and n will remain the same . Both and will decrease by 1 percentage point . IV . Both and r will remain the same . Both and will increase by 1 percentage point . Select 2. Now suppose decreases to 5%. The slope of the SML remains constant . How would this affect and ? will decrease by 1 percentage point and will remain the same .. will remain the same and will decrease by 1 percentage point . Both and will increase by 1 percentage point . IV Both and will remain the same . Both and will decrease by 1 percentage point -Select-.1. Now assume that remains at 6%, but 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 will be .2. Now assume that remains at 6%, but 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 will be %

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