As an equity analyst you are concerned with what will happen to the required return to Universal Toddler' stock as market conditions change. Suppose RF-5%, rM-10%, and bUT-1.5. a. Under current conditions, what is ruT, the required rate of return on UT Stock? Round your answer to two decimal places. b. 1. Now suppose RF increases to 6%. The slope of the SML remains constant. How would this affect m and fur? I. Both r and ruT will increase by 1% 11. rM will remain the same and ruT will increase by 1%. 11. rM will increase by 1% and rUT will remain the same. IV. Both in and ruT will decrease by 1%. V. Both rm and ruT Will remain the same. -Select- 2. Now suppose RF decreases to 4%. The slope of the SML remains constant. How would this affect n, and rUT? 1. Both fr, and rur will decrease by 196. 11. rM will decrease by 1% and rur will remain the same. 111. rM will remain the same and rUT will decrease by 1%. IV. Both n, and rUT will increase by 1%. V. Both rm and ruT will remain the same. -Select- c. 1. Now assume rRF remains at 5% but rM increases to 12%. The slope of the SML does not remain constant. How would these changes affect rur? rUT will increase by 396. II. ruT ll remain the same. 111. rur will decrease by 396. Select- 2. Now assume rRF remains at 5% but n falls to 9%. The slope of the SML does not remain constant. How would these changes affect rur? L rUT will decrease by 1.5%. IL. ruT will remain the same. 111. rUT will increase by 1.5%. -Select