Suppose = 5%, 10%, and b = 1.6. a. What is the required rate of return on Stock I? Round your answer to one decimal place. b. 1. Now suppose res increases to 6%. The slope of the SML remains constant. How would this affect and n? 1. Both and will increase by 1 percentage point II. T will remain the same and will increase by 1 percentage point. III. T will increase by 1 percentage point and will remain the same. IV. Both rand will decrease by 1 percentage point V. Both and will remain the same. Select 2. Now suppose of decreases to 4%. The slope of the SML remains constant. How would this affect and n? I. Both and will remain the same 11. Both and will decrease by 1 percentage point. III. T will decrease by 1 percentage point and n will remain the same. IV. T will remain the same and will decrease by 1 percentage point. V. Both and will increase by 1 percentage point. c. 1. Now assume that w remains at 5%, but my increases to 11%. The slope of the SML does not remain constant. How would these changes affect n7 Round your answer to one decimal place The new will be 2. Now assume that remains at 5%, but nu falls to 9%. The slope of the SML does not remain constant. How would these changes affect ? Round your answer to one decimal place. The new n will be b. 1. Now suppose l'ef increases to 6%. The slope of the SML remains constant. How would this affect rm and n? 1. Both rm and r, will increase by 1 percentage point. II. rm will remain the same and n will increase by 1 percentage point. III. I'm will increase by 1 percentage point and n will remain the same. IV. Both rm and will decrease by 1 percentage point. V. Both rm and n will remain the same. -Select- 2 THI IV V TRF decreases to 4%. The slope of the SML remains constant. How would this affect rand n? rm and will remain the same. Irmand i will decrease by 1 percentage point. 2. Now suppose rre decreases to 4%. The slope of the SML remains constant. How would this affect rm and n? I. Both rm and r, will remain the same. II. Both rm and will decrease by 1 percentage point III. rm will decrease by 1 percentage point and n will remain the same. IV. rm will remain the same and will decrease by 1 percentage point. V. Both rm and will increase by 1 percentage point. -Select- III IV V ssume that rre remains at 5%, but r increases to 11%. The slope of the SML does not remain constant. How wo mal place. n will be %