Suppose IRF = 7%, I'M = 12%, and b = 2.1. a. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. b. 1. Now suppose tre increases to 8%. The slope of the SML remains constant. How would this affect rm and ? I. I will remain the same and r, will increase by 1%. II. rm will increase by 1% and r, will remain the same. III. Both rm and will decrease by 1%. IV. Both rm and will remain the same. V. Both rm and will increase by 1%. -Select- 2. Now suppose rof decreases to 6%. The slope of the SML remains constant. How would this affect ry and m? I. Both rm and r; will decrease by 1%. II. I will decrease by 1% and will remain the same. III. rm will remain the same and will decrease by 1%. IV. Both rm and r; will increase by 1%. V. Bathrm and will remain the same. -Select- c. 1. Now assume that for remains at 7%, but in increases to 13%. The slope of the SML does not remain constant. How would these changes affect r ? Round your answer to two decimal places. The new n will be %. 2. Now assume that ref remains at 7%, but I'm falls 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 n will be