Why might investors demand a lower rate of return for an investment in ExxonMobil as compared to United Airlines?

Investors might demand a lower rate of return for an investment in ExxonMobil compared to United Airlines because ExxonMobil operates in the relatively stable and essential energy sector, which often benefits from consistent demand and cash flows. In contrast, United Airlines is more susceptible to economic fluctuations, consumer behavior, and external shocks, such as pandemics or geopolitical events, making it a riskier investment. This perceived stability and lower risk associated with ExxonMobil translate to a lower required rate of return.