REQUIRED RATE OF RETURN Stock R has a beta of 2.5, Stock S has a beta of 0.35, the required return on an average stock is 10%, and the risk-free rate of return is 3%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. % REQUIRED RATE OF RETURN Suppose IRF = 5%, rm = 10%, and b; = 1.3. a. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. b. 1. Now suppose of increases to 6%. The slope of the SML remains constant. How would this affect rm and ri? I. Both rm and r will remain the same. II. Both rm and i will increase by 1%. III. I'm will remain the same and r will increase by 1%. IV. I'm will increase by 1% and i will remain the same. V. Both rm and r; will decrease by 1%. -Select- 2. Now suppose rre decreases to 4%. The slope of the SML remains constant. How would this affect rm and ri? I. I'm will remain the same and will decrease by 1%. II. Both rm and i will increase by 1%. III. Both rm and i will remain the same. IV. Both rm and r; will decrease by 1%. V. I'm will decrease by 1% and r; will remain the same. -Select- c. 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 ri? Round your answer to two decimal places. The new ri will be 2. Now assume that ref remains at 5%, but im falls to 9%. The slope of the SML does not remain constant. How would these changes affect r;? Round your answer to two decimal places. The new r; will be %