Suppose RF = 3%, I'M = 12%, and b = 1.7. a. What is n, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rrf increases to 4%. 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. im will remain the same and n will increase by 1 percentage point. III. rm will increase by 1 percentage point and r, will remain the same. IV. Both rm and r will decrease by 1 percentage point. V. Both rm and i will remain the same. -Select- 2. Now suppose rof decreases to 2%. The slope of the SML remains constant. How would this affect rm and ? I. Both rm and r; will decrease by 1 percentage point. II. i will decrease by 1 percentage point and n will remain the same. III. I will remain the same and n will decrease by 1 percentage point. IV. Both rm and ri will increase by 1 percentage point. V. Both rm and r will remain the same. -Select- C. 1. Now assume that ref remains at 3%, but rm increases to 13%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new r will be %. 2. Now assume that rri remains at 3%, 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 one decimal place. The new r will be %