HR Industries (HRI) has a beta of 2.2, while LR Industries' (LRI) beta is 1.90. The risk-free rate is 3%, and the required rate of return on an average stock is 10%. The expected rate of inflation built into r_RF falls by 1.0 percentage points, the real risk-free rate remains constant, the required return on the market falls to 9.0%, and all betas remain constant. After all of these changes, what will be the difference in the required returns for HRI and LRI, that is, r_HRI - r_LRI.

Question 12 options:

	2.00%
	2.21%
	2.31%
	2.10%
	1.89%