The risk free rate on a stock is 3%, the required rate in the market is 7%, and the beta is 1.6. This is thp original position. Calculate the required rate of return, r. Now assume that investors are fearful, uneasy, with the current market situation and require a higher rate of return in the market. Thus, I'm increases by 2.5%. Calculate the required rate of return. 2 points, show work What happens to the SML? Circle one: 1 point Shifts Up or Shifts Down or Pivots Up or Pivots Down What happens to the slope? Circle one: 1 point DO 000 Slope remains the same or Slope gets steeper or Slope gets flatter 2012 Now assume that investors are confident, at ease, with the current market situation and require a lower rate of return in the market. Thus, In decreases by 1%. Calculate the required rate of return. 2 points, show work What happens to the SML? Circle one: 1 point Shifts Up or Shifts Down or Pivots Up or Pivots Down What happens to the slope? Circle one: 1 point Slope remains the same or Slope gets steeper or Slope gets flatter