10. Problem 8.12 (Required Rate of Return) eBook Problem Walk-Through Suppose - 4% -9%, and b - 1.7. a. What is r, the required rate of return on Stock i7 Round your answer to one decimal place. b. 1. Now suppose nus increases to 5%. The slope of the SML remains constant. How would this affect rm and 1? 1. Both and will decrease by 1 percentage point. 11. Both and r, will remain the same. III. Both and r, will increase by 1 percentage point IV. T will remain the same and I will increase by 1 percentage point. V. T will increase by 1 percentage point and will remain the same. -Select 2. Now suppose tre decreases to 3%. The slope of SML remains constant. How would this affect rand ? 1. Both rm and will decrease by 1 percentage point. II. T will decrease by 1 percentage point and r, will remain the same. III. I will remain the same and will decrease by 1 percentage point IV. Both rand n will increase by 1 percentage point V. Both rand n will remain the same. 1-Select v C. 1. Now assume that rus remains at 4%, 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 r will be 2. Now assume that re remains at 4%, but r falls to 8%. The slope of the SML does not remain constant. How would these changes affect ? Round your answer to one decimal place. The new n will be %