An analyst at Global Research is comparing the expected return on equities for two countries and gathers the following information. Calculate the expected return on equities for each country using the Grinold Kroner Model.

Country A - 2.7%

Country B - 3.1%

Country A Country B Country: 5.10% Change in Correlation with World Index: 7.45% Change in PE Ratio 1.60% 0.75% 90% Nominal Growth in Earnings 4.85% Change in Shares Outstanding. 0.70% 1.10% 2.50% Growth in Net Exports 2.80%