Suppose rRF = 6%, r = 12%, and b; = 1.4. 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 7%. The slope of the SML remains constant. How would this affect rm and ? I. Both rm and i will increase by 1 percentage point. II. rm will remain the same and i will increase by 1 percentage point. III. rm will increase by 1 percentage point and ri will remain the same. IV. Both rm and will decrease by 1 percentage point. V. Both rm and i will remain the same. -Select- 2. Now suppose TRF decreases to 5%. The slope of the SML remains constant. How would this affect rm and ri? I. Both rm and ri will decrease by 1 percentage point. II. IM will decrease by 1 percentage point and ri will remain the same. III. I will remain the same and i will decrease by 1 percentage point. IV. Both rm and i will increase by 1 percentage point. V. Both rm and will remain the same. - Select f. 1. Now assume that rRF remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new si will be %. 2. Now assume that rrr remains at 6%, but rm falls to 11%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new ri will be Suppose rRF = 6%, r = 12%, and b; = 1.4. 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 7%. The slope of the SML remains constant. How would this affect rm and ? I. Both rm and i will increase by 1 percentage point. II. rm will remain the same and i will increase by 1 percentage point. III. rm will increase by 1 percentage point and ri will remain the same. IV. Both rm and will decrease by 1 percentage point. V. Both rm and i will remain the same. -Select- 2. Now suppose TRF decreases to 5%. The slope of the SML remains constant. How would this affect rm and ri? I. Both rm and ri will decrease by 1 percentage point. II. IM will decrease by 1 percentage point and ri will remain the same. III. I will remain the same and i will decrease by 1 percentage point. IV. Both rm and i will increase by 1 percentage point. V. Both rm and will remain the same. - Select f. 1. Now assume that rRF remains at 6%, but rm increases to 13%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new si will be %. 2. Now assume that rrr remains at 6%, but rm falls to 11%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new ri will be