pose rRF=4%,rM=12%0, and bi=1.9 a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. b. 1. Now suppose rKF increases to 5%. The slope of the SML remains constant. How would this affect rM and r1 ? I. Both rm and n will remain the same. II. Both rm and n will increase by 1 percentage point. III. rM will remain the same and n will increase by 1 percentage point. IV. rm will increase by 1 percentage point and n will remain the same. V. Both rm and n will decrease by 1 percentage point. 2. Now suppose rRF decreases to 3%. The slope of the SML remains constant. How would this affect rmand r1 ? I. Both rm and r will remain the same. II. Both rM and r will decrease by 1 percentage point. III. Im will decrease by 1 percentage point and n will remain the same. IV. IM will remain the same and r1 will decrease by 1 percentage point. V. Both rM and ri will increase by 1 percentage point. The new ri will be \%. The new ri will be Y0 pose rRF=4%,rM=12%0, and bi=1.9 a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. b. 1. Now suppose rKF increases to 5%. The slope of the SML remains constant. How would this affect rM and r1 ? I. Both rm and n will remain the same. II. Both rm and n will increase by 1 percentage point. III. rM will remain the same and n will increase by 1 percentage point. IV. rm will increase by 1 percentage point and n will remain the same. V. Both rm and n will decrease by 1 percentage point. 2. Now suppose rRF decreases to 3%. The slope of the SML remains constant. How would this affect rmand r1 ? I. Both rm and r will remain the same. II. Both rM and r will decrease by 1 percentage point. III. Im will decrease by 1 percentage point and n will remain the same. IV. IM will remain the same and r1 will decrease by 1 percentage point. V. Both rM and ri will increase by 1 percentage point. The new ri will be \%. The new ri will be Y0