Suppose ref = 4%, r = 12%, and b; = 1.5. a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rrf increases to 5%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and ri will remain the same. II. Both rm and n will increase by 1 percentage point. III. I will remain the same and r, will increase by 1 percentage point. IV. rm will increase by 1 percentage point and r will remain the same. V. Both rm and i will decrease by 1 percentage point. -Select- 2. Now suppose rrf decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? I. rm will decrease by 1 percentage point and i will remain the same. II. rm will remain the same and n will decrease by 1 percentage point. III. Both rm and n will increase by 1 percentage point. IV. Both and r; will remain the same. V. Both rm and i will decrease by 1 percentage point. -Select- c. 1. Now assume that rrr remains at 4%, but rm increases to 13%. 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 %. PRF remains at 4%, but to 11%. The slope the SML does not remain constant. How would changes affect ni? Round your answer to 2. Now assume one decimal place. The new r will be %