Suppose rri = 4%, IM = 12%, and b; = 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 5%. The slope of the SML remains constant. How would this affect rm and r? 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 i 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. -Select- v 2. Now suppose IRF decreases to 3%. The slope of the SML remains constant. How would this affect rm and r? I. rm will remain the same and r will decrease by 1 percentage point. II. Both rm and r, will increase by 1 percentage point. III. Both rm and i will remain the same. IV. Both rm and ri will decrease by 1 percentage point. V. rm will decrease by 1 percentage point and r will remain the same. -Select- v c. 1. Now assume that rrr remains at 4%, but rm increases to 13%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new ri will be %. 2. Now assume that rre remains at 4%, but rm falls to 11%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new ri will be %