equity analyst you are concerned with what will happen to the required return to Universal Toddler' stock as market conditions change. Suppose rRF=3%, rm =14%, and bur =1.2. a. Under current conditions, what is YUT, the required rate of return on UT Stock? Round your answer to one decimal place. % b. 1. Now suppose rRF increases to 4%. The slope of the SML remains constant. How would this affect rM and rUT ? I. Both rm and rut will decrease by 1 percentage point. II.Both rm and rUT will remain the same. III. Both rM and rU will increase by 1 percentage point. IV. rM will remain the same and ruT will increase by 1 percentage point. V. rM will increase by 1 percentage point and rut will remain the same. 2. Now suppose rRF decreases to 2%. The slope of the SML remains constant. How would this affect rM and ruT? I. M will decrease by 1 percentage point and ruT will remain the same. II. rM will remain the same and ruT will decrease by 1 percentage point. III. Both rM and r ro will increase by 1 percentage point. IV. Both rm and nut will remain the same. V. Both r and rut will decrease by 1 percentage point. c. 1. Now assume rRF remains at 3% but rMincreasesto16%. The slope of the SML does not remain constant. How would these changes affect rut? I. rut will increase by 2.4 percentage point. II. rut will remain the same. III. IUT will decrease by 2.4 percentage point. 2. Now assume rRF remains at 3% but M falls to 13%. The slope of the SML does not remain constant. How would these changes affect rut? I. rur will remain the same. III. VUT will increase by 1.2 percentage point