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What are the expected returns for the three stocks

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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 growth, and interest rates. The γs' 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:

i. What are the expected returns for each of the three stocks next year?

Reference no: EM132569523

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