Suppose rRF=8%,rM=9%, and bi=1.2 a. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. % b. 1. Now suppose rRF increases to 9%. The slope of the SML remains constant. How would this affect rM and ri? I. Both rM and ri will increase by 1%. II. rM will remain the same and ri will increase by 1%. III. rM will increase by 1% and ri will remain the same. IV. Both rM and ri will decrease by 1%. V. Both rM and ri will remain the same. 2. Now suppose rRF decreases to 7%. The slope of the SML remains constant. How would this affect rM and ri ? I. rM will decrease by 1% and ri will remain the same. II. rM will remain the same and ri will decrease by 1%. III. Both rM and ri will increase by 1%. IV. Both rM and ri will remain the same. V. Both rM and ri will decrease by 1%. c. 1. Now assume that rRF remains at 8%, but rmm increases to 10%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new ri will be %. 2. Now assume that rRF remains at 8%, but rM falls to 8%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new ri will be %