uppose rm=4%,rm=11%, and by=1.1. a. What is i, the required rate of retum on stock i? Round your answer to one decimal place. % b. 1. Now suppose raf increases to 5%. The slope of the SML. remains constant. How would this affect rM and n ? 1. Both rm and n will increase by 1 percentage point. II. rM will remain the same and n will increase by 1 percentage point. III. ni will increase by 1 percentage point and ni will remain the same. IV. Both rm and in will decrease by 1 percentage point. V. Both nmand in will remain the same. 2. Now suppose rnr decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? 1. n will remain the same and n will decrease by 1 percentage point. II. Both fy and A will increase by 1 percentage point. III. Both m and n will remain the same. IV. Both n and n. will decrease by 1 percentage point. V. ry will decrease by 1 percentage point and n will remain the same. c. 1. Now assume that rur remains at 4\%, but ru increases to 12%. The stope of the SML does not remain constant. How would these changes affect n? Round your answer to one decimal place. The new n willi be 2. Now assume that ruy remains at 4%, but ru falis 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 on will be