Suppose rRF = 6%, rM = 10%, and bi = 1.2. What is ri, the required...

Suppose rRF = 6%, rM = 10%, and bi = 1.2. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. Now suppose rRF increases to 7%. The slope of the SML remains constant. How would this affect rM and ri? rM will increase by 1% and ri will remain the same. Both rM and ri will decrease by 1%. Both rM and ri will remain the same. Both rM and ri will increase by 1%. rM will remain the same and ri will increase by 1%. Now suppose rRF decreases to 5%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will decrease by 1%. rM will decrease by 1% and ri will remain the same. rM will remain the same and ri will decrease by 1%. Both rM and ri will increase by 1%. Both rM and ri will remain the same. Now suppose rRF decreases to 5%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will decrease by 1%. rM will decrease by 1% and ri will remain the same. rM will remain the same and ri will decrease by 1%. Both rM and ri will increase by 1%. Both rM and ri will remain the same. Now assume that rRF remains at 6%, but rM falls to 9%. The slope of the SML does not remain constant. How would these changes affect ri? Round your answer to two decimal places. The new ri will be

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

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