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Suppose that you have determined that to estimate the expected returns of Stock 1,2, and 3, there are three important macro-economic factors namely: Inflation, economic
Suppose that you have determined that to estimate the expected returns of Stock 1,2, and 3, there are three important macro-economic factors namely: Inflation, economic growth, and interest rates. The s' are 2.8% for inflation, 3.5% for GDP growth and 4.8% for the interest rates. If the following relationship holds for these stocks:
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