-12 ) REQUIRED RATE OF RETURN Suppose rF-496, rM 10%, and b.-1.4 a. What is ri, the required rate of return on Stock i? b. N ow suppose that rRF (1) increases to 5% or (2) decreases to 3%. The slope of the SML remains constant. How would this affect rM and r? C. Now assume that rRF remains at 4%, but rM (1) increases to 12% or (2) falls to 9%. The slope of the SML does not remain constant. How would these changes affect r