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Consider the information below for Postman Bfiilders Inc. Suppose that the expected inflation rate and thus the inflation premium increase by 2.0 percentage points, and

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Consider the information below for Postman Bfiilders Inc. Suppose that the expected inflation rate and thus the inflation premium increase by 2.0 percentage points, and Postman acquires risky assets that increase its beta by the indicated percentage. What is the firm's new required rate of return? Select the correct answer. a. 15.35% b. 15.59% c. 15.4196 d. 15.47% e. 15.53% The $10.00 million mutual fund Henry manages has a beta of 1.05 and a 9.50% required return. The risk-fr rate is 4.20%. Henry now receives another $12.75 million, which he invests in stocks with an average beta o 0.65 . What is the required rate of return on the new portfolio? (Hint: You must first find the market risk premium, then find the new portfolio beta.) Select the correct answer. a. 8.37% b. 8.19% c. 8.10% d. 8.46% e. 8.28% Nystrand Corporation's stock has an expected return of 11.25%, a beta of 1.25 , and is in equilibrium. If the risk free rate is 5.00%, what is the market risk premium? Select the correct answer. a. 5.00% b. 5.109% c. 5.20% d. 5.30% e. 5.40%

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