REQUIRED RATE OF RETURN Suppose rri = 4%, M = 10%, and bj = 1.4. 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 5%. The slope of the SML remains constant. How would this affect rm and ri? I. I will remain the same and i will increase by 1%. II. rm will increase by 1% and i will remain the same. III. Both rm and r will decrease by 1%. IV. Both rm and ri will remain the same. V. Both rm and r will increase by 1%. -Select- 2. Now suppose RF decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and ri will increase by 1%. II. Both rm and ri will remain the same. III. Both rm and ri will decrease by 1%. IV. IM will decrease by 1% and ri will remain the same. V. rm will remain the same and will decrease by 1%. -Select- C. 1. Now assume that the remains at 4%, but rm increases to 11%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to two decimal places. The new ri will be %. 2. Now assume that ref remains at 4%, but im falls to 9%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new r will be %