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REQUIRED RATE OF RETURNSuppose rRF = 8%, rM = 13%, andbi = 1.2.What is ri, the required rate of return on Stock i?Round your answer to two decimal places.%1. Now suppose rRF increases to 9%. The slope of theSML remains constant. How would this affect rM andri?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 willincrease by 1%.rM will increase by 1% and ri will remainthe same.2. Now suppose rRF decreases to 7%. The slope of theSML remains constant. How would this affect rM andri?rM will decrease by 1% and ri will remainthe same.rM will remain the same and ri willdecrease by 1%.Both rM and ri will increase by 1%.Both rM and ri will remain the same.Both rM and ri will decrease by 1%.1. Now assume that rRF remains at 8%, butrM increases to 14%. The slope of the SML does notremain constant. How would these changes affect ri?Round your answer to two decimal places.The new ri will be %.2. Now assume that rRF remains at 8%, butrM falls to 12%. The slope of the SML does not remainconstant. How would these changes affect ri? Round youranswer to two decimal places.The new ri will be %.