What is your revised estimates of the expected rate

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Question: 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 5%, and IR 4.0%.A stock with a beta of 1.2 on IP and o.6 on IR currently is expected to provide a rate of return of 8%. If industrial production actually grows by 6%, while the inflation rate turns out to be 6.0%, what is your revised estimates of the expected rate of return on the stock?

Reference no: EM133434318

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