A B Suppose you are the money manager of a $4,5 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta $ 420,000 1.50 500,000 (0.50) 1,380,000 1.25 D 2.200,000 0.75 If the market's required rate of return is 12% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round Intermediate calculations. Round your answer to two decimal places. Suppose TRF = 5%, P = 9%, and b = 1.5. a. What is n, the required rate of return on Stock i? Round your answer to two decimal places. % b. 1. Now suppose per increases to 6%. The slope of the SML remains constant. How would this affect and ? 1. Both rand n will remain the same. II. Bothm and will increase by 1%. III. T will remain the same and will increase by 1%. IV. will increase by 1% and n will remain the same. V. Both rm and n will decrease by 1%. D Select 2. Now suppose nu decreases to 4%. The slope of the SML remains constant. How would this affect ne and n? I. Both rm and n will remain the same. II. Both rand n will decrease by 1%. III. I will decrease by 1% and n will remain the same. IV. I will remain the same and n will decrease by 1%. V. Both rm and n will increase by 1%. c. 1. Now assume that rep remains at 5%, but ru increases to 10%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be %. 2. Now assume that ru remains at 5%, but I falls to 8%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new n will be