As an equity analyst you are concerned with what will happen to the required return to Universal Toddler" stock as market conditions change. Suppose rue =3%,m=13%, and but=1.6 a. Under current conditions, what is Rut, the required rate of return on UT Stock? Round your answer to one decimal place. of b. 1. Now suppose faf increases to 4\%s. The slope of the SML remains constant. How would this affect ny and nu? I. Im will remain the same and rut will increase by 1 percentage point. II. rm will increase by 1 percentage point and rut will remain the same. III. Both ty and fur will decrease by 1 percentage point. IV. Both ny and nut will remain the same. V. Both fu and rut will increase by 1 percentage point. 2. Now suppose raf decreases to 2%. The slope of the SML remains constant. How would this affect ny and nur? I. my will remain the same and rut will decrease by 1 percentage point. II. Both m and rut will increase by 1 percentage point. III. Both ma and rur will remain the same. IV. Both ru and nos will decrease by 1 percentage point. V. cy wil decrease by 1 percentage point and nur will remain the same. 1. Now assume ref remains at 3% but rm increases to 15%. The slope of the SML does not remain constant. How would these changes affect rum? I. ut will remain the same. II. Tur will increase by 3.2 percentage point. III. tyr will decrease by 3.2 percentage point. 2. Now assume nus remains at 3% but ry falls to 12%. The slope of the SML does not remain constant. How would these changes affect nut? 1. fir will remain the same. 11. rur wifl decrease by 1.6 percentage point. III. Rut will increase by 1.6 percentage point