uppose raf =5%,rm=9%, and bi=1.4. What is n, the required rate of return on Stock I? Round your answer to one decimal place. % b. 1. Now suppose rRF increases to 6%. The slope of the SML remains constant. How would this affect rM and n ? I. Both rm and r will remain the same. II. Both m and r will increase by 1 percentage polnt. III. nM will remain the same and n will increase by 1 percentage point. IV. I will increase by 1 percentage point and n will remain the same. V. Both rm and n will decrease by 1 percentage point. 2. Now suppose rRF decreases to 4%. The slope of the SML remains constant. How would this affect rM and n ? 1. Both m and n will increase by 1 percentage point. II. Both my and n will remain the same. III. Both m and n will decrease by 1 percentage point. IV. r w will decrease by 1 percentage point and n will remain the same. V. rm will remain the same and n will decrease by 1 percentage point. c. 1. Now assume that me remains at 5%, but nm increases to 10%. The slope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new n will be % 2. Now assume that raf remains at 5%, but r falls to 8%. The slope of the SML does not remain constant. How would these changes affect n ? Round your answer to one decimal place. The new n will be