Question: (Please use a math, finance equation and/ or formula. DONT USE A SHEET CHART, EXCEL, OR GRAPH) 7) Investors currently expect inflation to average 2.5%

(Please use a math, finance equation and/ or formula. DONT USE A SHEET CHART, EXCEL, OR GRAPH)

7) Investors currently expect inflation to average 2.5% in the future, while the real risk-free rate is 1.5%. If ACME company has a beta of 1.4 and its realized rate of return has averaged 6.5% over the past 5 years, what is its required rate of return if the market risk premium is 7%?

13.3%

14.3%

13.5%

13.8%

14.1%

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