uppose rer =6%,fr=13%, and b1=1.4, a. What is n. the required rate of return on stocki? Round your answer to ene decimal phace. b. 1. Now suppose re increases to 7 th. The slope of the smL remuins constant. How would this affect ner and n ? 1. r wit increase by 1 percentage point and h will remain the same. 11. Hoth n and n will decrease by 1 percentage point. ilt. Boti in and n wull remain the same. IV. Both n and n will increase by 1 percentage point. v. Ho will remain the same and n will increase by 1 percentage point. 2. Now suppose fur decrestes to 5\%. The slope of the SML remains constant. How wovid this affect hin and on? 1. ne will remain the same and n will decrease by 1 percentage point. iI. Both ny and n will increase by 1 percentage point. III. Both 5 tand n will remain the same. IV. Both f1 and n will decrease by 1 percentage point. V. ni wil decrease by 1 percentage point and n will remain the same. c. 1. Now assume that fer remains at 6%, but rie incresses to 14\%. The slose of the sML does not remain conatant. How would these changes affect n? Round your answer to "one decimal place The newn wist be 2. Now assume that to remains at 6\%, but nu falls to 12\%. The slope of the sM. does not remain constant. How nould there changes affect n7 hound your ansmer to one decinal place. The rew nowat be