= Suppose TRF 3%, rM = 12%, and b = 1.5. a. What is n, the required rate of return on Stock i? Round your answer to one decimal place. 16.5 % b. 1. Now suppose FRF increases to 4%. The slope of the SML remains constant. How would this affect and n? 1. Both M and ri will increase by 1 percentage point. II. TM will remain the same and n will increase by 1 percentage point. III. TM will increase by 1 percentage point and n will remain the same. IV. Both m and n will decrease by 1 percentage point. V. Both M and i will remain the same. III 2. Now suppose FRF decreases to 2%. The slope of the SML remains constant. How would this affect m and n? I. Both and n will decrease by 1 percentage point. II. M will decrease by 1 percentage point and ri will remain the same. III. M will remain the same and n will decrease by 1 percentage point. IV. Both m and r will increase by 1 percentage point. V. Both M and n will remain the same. II