pose l'rf - 3%, rm = 12%, and b; = 1.4. a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose tre increases to 4%. The slope of the SML remains constant. How would this affect rm and ri? I. Both rm and will increase by 1 percentage point. II. rm will remain the same and r; will increase by 1 percentage point. III. rm will increase by 1 percentage point and i will remain the same. IV. Both rm and will decrease by 1 percentage point. V. Both rm and will remain the same. -Select- 2. Now suppose for decreases to 2%. The slope of the SML remains constant. How would this affect rm and r? I. Both rm and will increase by 1 percentage point. II. Both rm and i will remain the same. III. Both rm and will decrease by 1 percentage point. IV. rm will decrease by 1 percentage point and r; will remain the same. V. rm will remain the same and will decrease by 1 percentage point. -Select- c. 1. Now assume that ree remains at 3%, but rm increases to 13%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new r will be %. 2. Now assume that ree remains at 3%, but im falls to 11%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new r will be %