Question: the answer is not 14.4% and is not 11.7% please get it right this time Required: Suppose two factors are identified for the U.S. economy:

the answer is not 14.4%

and is not 11.7%

please get it right this time

Required: Suppose two factors are 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 R7%. A stock with a beta of 1 on IP and 0.6 on R currently is expected to provide a rate of return of 14\%. If industrial production actually grows by 6%, while the inflation rate turns out to be 9%, what is your best guess for the rate of return on the stock? (Round your answer to 1 decimal place.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Jamie Lee Jackson, age 26, is in her last semester of college and is waiting for graduation day that is just around the corner! It is the time of year again when Jamie Lee must file her annual...

Required: Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 6% and IR 5%. A stock with a beta of...

Please explain question #12. attached document with the document is provided. For problems 12-16, assume that you manage a risky portfolio with an expected rate of return of 17% and a standard...

ssignment #6, Chapter 7 i 10 ts Book Print rences J Rate of return Saved 11.7 % NBA 2K18 Mode Br... G dualshock 4 controll... Help Required: Suppose two factors are identified for the U.S. economy:...

Problem 7-32 (Algo) Required: Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 6% and IR 6%. A...

Required: Suppose two factors are 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 6%. A stock with a beta of...

Required: Suppose two factors are 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 7%. A stock with a beta of...

Required: Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 4% and IR 6%. A stock with a beta of...

Required: Suppose two factors are 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 6 % . A stock with a...

Business case between American company that licensee his product to Japanese company and you need to give advice on it. Please explain and give an example Your answer must be checked in turnit in...

Explain how the consumer sales promotions identified in Figure 14-1 can be executed with Internet media.

Which of the following increases the stock basis of a shareholder in an S Corporation? Taxable Distributions to the shareholder. Long - Term Capital Loss. Long - Term Capital Gain. Nondeductible...

Ash Manufacturing kimyasal bir pestisit retmekte ve sre maliyetlendirmesi kullanmaktadr. Kartrma, Rafine Etme ve Paketleme olmak zere ileme departman bulunmaktadr. 1 Ocak'ta ilk departman olan...