X A-Z Courses O Catalog and Study Tools Rental Options College Success Tips Career Success Tips ECOMMENDED FOR YOU How to Answer Matching Questions Help Give Feedback = eBook = Suppose rar 5%, TM - 9%, and by 1.3. Problem Walk-Through a. What is n, the required rate of return on Stock i? Round your answer to one decimal place. % b. 1. Now suppose RF increases to 6%. The slope of the SML remains constant. How would this affect M and ? I. M will remain the same and r will increase by 1 percentage point. n II. M will increase by 1 percentage point and n will remain the same. III. Both M and n will decrease by 1 percentage point. IV. Both M and n will remain the same. V. Both M and r will increase by 1 percentage point. -Select- n 2. Now suppose RF decreases to 4%. The slope of the SML remains constant. How would this affect M and r? I. Both M and r will decrease by 1 percentage point. II. M will decrease by 1 percentage point and r will remain the same. III. M will remain the same and r, will decrease by 1 percentage point. IV. Both M and n will increase by 1 percentage point. V. Both M and , will remain the same. -Select- c. 1. Now assume that FRF remains at 5%, but m increases to 10%. The slope of the SML does not remain constant. How would these changes affect r? Round your answer to one decimal place. The new n will be %. 2. Now assume that FRF remains at 5%, but M falls to 8%. The slope of the SML does not remain constant. How would these changes affect ni Round your answer to one decimal place. The new n will be %. Got It A+