Suppose rRF=6%1,rM=12%r and bi=1.5. a. What is r, the required rate of retum on Stock i? Round your answer to one decimal place. 96 b. 1. Now suppose rRF increases to 7%. The slope of the SML remains constant. How would this affect rM and ri? I. will remain the same and ri will increase by 1 percentage point. II. M will increase by 1 percentage point and will remain the same. III. Both m and r will decrease by 1 percentage point. r. Both m and r will remain the same. V. Both rm and ri will increase by 1 percentage point. 2. Now suppose rRF decreases to 5%. The slope of the 5ML remains constant. How would this affect nM and ri? I. Both and ri will decrease by 1 percentage point. II. TM will decrease by 1 percentage point and ri will remain the same. III. mM will remain the same and r will decrease by 1 percentage point. IV. Both mm and r, will increase by 1 percentage point. V. Both rm and r will remain the same. place. The new ri will be /4. place. The new r i will be %. Check My Work (2 remaining)