A stock has a required return of $12\%,$ the risk$-$free rate is $3\%,$ and the market risk premium is $6\%.$

a$.$ What is the stock's beta? Round your answer to two decimal places.

$x$

b$.$ If the market risk premium increased to $7\%,$ what would happen to the stock's required rate of return? Assume that the risk$-$free rate and the

beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places.

I. If the stock's beta is greater than $1\mathrm{.}0,$ then the change in required rate of return will be greater than the change in the market risk

premium.

II$.$ If the stock's beta is less than $1\mathrm{.}0,$ then the change in required rate of return will be greater than the change in the market risk

premium.

III. If the stock's beta is greater than $1\mathrm{.}0,$ then the change in required rate of return will be less than the change in the market risk

premium.

IV$.$ If the stock's beta is equal to $1\mathrm{.}0,$ then the change in required rate of return will be greater than the change in the market risk

premium.

V $.$ If the stock's beta is equal to $1\mathrm{.}0,$ then the change in required rate of return will be less than the change in the market risk premium.