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The risk premium for exposure to exchange rates is 7%, and the firm has a beta relative to exchange rates of .5. The risk premium

The risk premium for exposure to exchange rates is 7%, and the firm has a beta relative to exchange rates of .5. The risk premium for exposure to the consumer price index is -4%, and the firm has a beta relative to the CPI of .7. If the risk-free rate is 2%, what is the expected return on this stock?

1.4%

.3%

2.7%

2.4%

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