a mumm- Suppose rm = 5%, m = 12%, and bi = 1.2. ough a. ill/hat is n! the required rate of return on Stock i? Round your answer to one decimal place. ' L % b. 1. Now suppose nu: Increases to 6%. The slope of the SML'remains constant. How would thls affect m and n? 1. Both rM and n will decrease by 1 percentage point. .II. Both in and n will remain the same. III. Both m and n will increase by 1 percentage point. IV. no will remain the same and n will increase by 1 percentage point. V. rm will increase by 1 percentage point and n will remain the same. - 2. Now suppose rRF decrease-'5 to 4%. The slope of the SML remains constant. How would this affect rm and n? 1. Both m and n will increase by 1 percentage point. II. Both m and n will remain the same. III. Both m and r: will decrease by 1 percentage point. IV. in will decrease by 1 percentage point and n will remain the same. V. m will remain the same and n will decrease by 1 percentage point. -Select V c. 1. Now assume that m; remains at 5%, but m increases to 13%. The slope of the SML does not remain constant. How would thlse changes affect n? Round your answer to one decimal place. The new r. will be