Check My Work eBook Problem Walk-Through Suppose RF = 5%, M = 10%, and b = 1.3. 2. What is n, the required rate of return on Stock i? Round your answer to one decimal place. b. 1. Now suppose rrf increases to 6%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and n will increase by 1 percentage point. II. M will remain the same and ri will increase by 1 percentage point. III. IM will increase by 1 percentage point and ri will remain the same. IV. Both rm and i will decrease by 1 percentage point. V. Both rm and n will remain the same. -Select- 2. Now suppose IRF decreases to 4%. The slope of the SML remains constant. How would this affect rm and n? I. I will decrease by 1 percentage point and i will remain the same. II. IM will remain the same and will decrease by 1 percentage point. III. Both rm and i will increase by 1 percentage point. IV. Both rm and ri will remain the same. V. Both rm and n will decrease by 1 percentage point. -Select- 1. Now assume that rrr remains at 5%, but rm increases to 11%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new ri will be % 2. Now assume that Irf remains at 5%, but I falls to 9%. The slope of the SML does not remain constant. How would these changes affect ni? Round your answer to one decimal place. The new n will be % Check My Work Check My Work eBook Problem Walk-Through Suppose RF = 5%, M = 10%, and b = 1.3. 2. What is n, the required rate of return on Stock i? Round your answer to one decimal place. b. 1. Now suppose rrf increases to 6%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and n will increase by 1 percentage point. II. M will remain the same and ri will increase by 1 percentage point. III. IM will increase by 1 percentage point and ri will remain the same. IV. Both rm and i will decrease by 1 percentage point. V. Both rm and n will remain the same. -Select- 2. Now suppose IRF decreases to 4%. The slope of the SML remains constant. How would this affect rm and n? I. I will decrease by 1 percentage point and i will remain the same. II. IM will remain the same and will decrease by 1 percentage point. III. Both rm and i will increase by 1 percentage point. IV. Both rm and ri will remain the same. V. Both rm and n will decrease by 1 percentage point. -Select- 1. Now assume that rrr remains at 5%, but rm increases to 11%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new ri will be % 2. Now assume that Irf remains at 5%, but I falls to 9%. The slope of the SML does not remain constant. How would these changes affect ni? Round your answer to one decimal place. The new n will be % Check My Work