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CAPM AND REQUIRED RETURN

HR Industries $($HRI$)$ has a beta of $1\mathrm{.}4,$ while LR Industries's $($LRI$)$ beta is $0\mathrm{.}5.$ The risk$-$free rate is $6\%,$ and the required rate of return on an average stock is $13\%.$ The expected rate

of inflation built into $r_{RF}$ falls by $1\mathrm{.}5$ percentage points; the real risk$-$free rate remains constant; the required return on the market falls to $10\mathrm{.}5\%$ and all betas remain constant.

After all of these changes, what will be the difference in the required returns for HRI and LRI? Round your answer to two decimal places.

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