Question: Suppose there is one systemic factor that affect stocks returns in the US economy: the interest rate (IR). IR was expected to grow by 8%.

Suppose there is one systemic factor that affect stocks returns in the US economy: the interest rate (IR). IR was expected to grow by 8%. If the actual growth rate was 4% and the beta on the stock is 1.25, what is the new expected return on the stock if you previously expected it to return 10%. (Enter the value in percent, so 1% = 1)

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