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a. Under current conditions, what is rut, the required rate of return on UT Stock? Round your answer to two b. L Now suppose rRF
a. Under current conditions, what is rut, the required rate of return on UT Stock? Round your answer to two b. L Now suppose rRF increases to 5%. The slope of the SML remains constant. How would this affect rM and rur? I. rM will remain the same and rUT will increase by 1%. 11, he will increase by 1% and rur will remain the same. 111. Both rM and rUT will decrease by 1%. IV. Both rM and rur will remain the same V. Both rM and rUT will increase by 1% 2. Now suppose rar decreases to 3%. The slope of the SML remains constant. How would this affect rM and rur? 1. Both rM and rr wil increase by 1% II. Both rM and ruT will remain the same 111. Both rM and r UT will decrease by 1% IV. rM will decrease by 1% and rUT will remain the same. v. rM will remain the same and rUT will decrease by 1%. . Now assume rar remains at 4% but ru increases to 10%. The slope of the SML does not remain constant. How would these changes affect rut? L rur will decrease by 3%. 11. fur will remain the same 11. rUT will increase by 3%
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