REQUIRED RATE OF RETURN 1.4 % , rM- 13% , and bi Suppose rRF=6 a. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. % b. 1. Now suppose rRF increases to 7%. The slope of the SML remains constant. How would this affect rM and r? I. Both rM and r will remain the same. II. Both rM and r will increase by 1%. III. rM will remain the same and r will increase by 1% IV. M will increase by 1% and ri will remain the same. V. Both rM and r, will decrease by 1%. -Select 2. Now suppose FRE decreases to 5%. The slope of the SML remains constant. How would this affect rM and r? I. Both rM and r will decrease by 1% II. M will decrease by 1% andr will remain the same. III. rM will remain the same and n will decrease by 1%. IV. Both rM and ri will increase by 1%. v. Both rM and r will remain the same. -Select c. 1. Now assume that rRF remains at 6 %, but rM increases to 14%. The slope the SML does not remain constant. How would these changes affect r? Round your answer to two decimal places. The new r will be % 2. Now assume that rRF remains at 6%, but rM falls to 12%. The slope of the SML does not remain constant. How would these changes affect r? Round your answer to two decimal places. The new ri will be