uppose rRF=4%,rM=12%, and bi=1.6 a. What is r1, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rRF increases to 5%. The slope of the SML remains constant. How would this affect rM and n ? I. Both rm and n will decrease by 1 percentage point. II. Both rM and ri will remain the same. III. Both rM and n will increase by 1 percentage point. IV. rM will remain the same and ri will increase by 1 percentage point. V. rM will increase by 1 percentage point and ri will remain the same. 2. Now suppose raf decreases to 3%. The slope of the SML remains constant. How would this affect rm and n? I. Both rM and ri will decrease by 1 percentage point. II. rM will decrease by 1 percentage point and r1 will remain the same. III. rM will remain the same and ri will decrease by 1 percentage point. IV. Both rM and r1 will increase by 1 percentage point. V. Both rm and n will remain the same. decimal place. The new r1 will be % place. The new ri will be %