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Stock HB has a beta of 1.5 and Stock LB has a beta of 0.5. The market is in equilibrium. Suppose the expected inflation increases
Stock HB has a beta of 1.5 and Stock LB has a beta of 0.5. The market is in equilibrium. Suppose the expected inflation increases by 2%p, but there is no change in the required rate of return on market portfolio. What is the change in the difference between the required returns on HB or LB?
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