uppose rRF=6%,rM=13%, and bi=1.3. a. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose rRF increases to 7%. The slope of the SML remains constant. How would this affect rM and ri ? I. rM will increase by 1 percentage point and ri will remain the same. II. Both rM and ri will decrease by 1 percentage point. III. Both rM and ri will remain the same. IV. Both rM and ri will increase by 1 percentage point. V. r m will remain the same and r will increase by 1 percentage point. 2. Now suppose rRF decreases to 5%. The slope of the SML remains constant. How would this affect rM and ri ? I. Both rM and ri will increase by 1 percentage point. II. Both rmm and rii will remain the same. III. Both rM and ri will decrease by 1 percentage point. IV. rM will decrease by 1 percentage point and ri will remain the same. V. rM will remain the same and ri will decrease by 1 percentage point. c. 1. Now assume that rRF remains at 6%, but rm increases to 14%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to one decimal place. The new ri will be %. 2. Now assume that rRF remains at 6%, but rM falls to 12%. The slope of the SML does not remain constant. How would these changes affect ri ? Round your answer to one decimal place. The new ri will be %