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Suppose that (1) investors expect a 3.00% rate of inflation in the future, (2) the real risk-free rate is 3.5%, (3) the market risk premium

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Suppose that (1) investors expect a 3.00% rate of inflation in the future, (2) the real risk-free rate is 3.5%, (3) the market risk premium is 12.50%, (4) Talcott Inc.'s beta is 0.70, and (5) its realized rate of return has averaged 13.5% over the last 5 years. Calculate the required rate of return for Talcot Inc

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