Suppose rRF=5%,rM=12%, and bi=1.1. a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rRF increases to 6%. The slope of the SML remains constant. How would this affect rM and ri ? I. rM will increase by 1 percentage point and ri will remain the same. II. Both rM and ri will decrease by 1 percentage point. III. Both rM and ri will remain the same. IV. Both rM and ri will increase by 1 percentage point. V. rM will remain the same and ri will increase by 1 percentage point. 2. Now suppose rRF decreases to 4%. The slope of the SML remains constant. How would this affect rM and ri ? I. Both rM and ri will increase by 1 percentage point. II. Both rM and ri will remain the same. III. Both rM and ri will decrease by 1 percentage point. IV. rM will decrease by 1 percentage point and ri will remain the same. V. rM will remain the same and ri will decrease by 1 percentage point. The new ri will be %. The new ri will be %