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Chapter 10: 1. Consider the following multifactor model of security returns for a particular stock. Factor Factor Beta Factor Risk Premium Inflation 1.1 8% Industrial

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Chapter 10: 1. Consider the following multifactor model of security returns for a particular stock. Factor Factor Beta Factor Risk Premium Inflation 1.1 8% Industrial production 0.6 9 0.3 7 Oil prices If T-bills currently offer a 7% yield, find the expected rate of return on this stock if the market views the stock as fairly priced

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