Suppose r_RF = 6%; r_M = 11%, and b_i = 1.2. What is r_i, the required rate of return on Stock i? Now suppose r_RF increases to 7%. The slope of the SML remains constant. How would this affect r_M and r_i? r_M will increase by 1% and r_i will remain the same. Both r_M and r_i will decrease by 1%. Both r_M and r_i, will remain the same. Both r_M and r_i will increase by 1%. r_M will remain the same and r_i, will Increase by 1%. Now suppose r_RF decreases to 5%. The slope of the SML remains constant. How would this affect r_M and r_i? Both r_M and r_i will increase by 1%. Both r_M and r_i will remain the same. Both r_M and r_i will decrease by 1%. r_M will decrease by 1% and r_i will remain the same. r_M will remain the same and r_i will decrease by 1%. Now assume that r_RF remains at 6% but r_M increases to 12%. The slope of the SML does not remain constant. How would these changes affect r_i? The new r_i will be % Now assume that r_RF remains at 6% but r_M falls to 10%. The slope of the SML does not remain constant. How would these changes affect r_i