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Business, 04.10.2020 19:01 gedntrxAa

Suppose that two factors have been identified for the U. S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 4%, and IR 2.0%. A stock with a beta of 2.5 on IP and 1.8 on IR currently is expected to provide a rate of return of 12%. If industrial production actually grows by 6%, while the inflation rate turns out to be 5.5%, what is your revised estimate of the expected rate of return on the stock

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