A stock has a required return of $8\%,$ the risk$-$free rate is $2\mathrm{.}5\%,$ and the market risk premium is $4\%.$

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

b$.$ If the market risk premium increased to $5\%,$ 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 equal to $1\mathrm{.}0,$ 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 equal to $1\mathrm{.}0,$ then the change in required rate of return will be less 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 greater than the change in the market risk premium.

IV$.$ 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.

V$.$ 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.

$-$Select$--$

Stock's required rate of return will be

$\%.$