Suppose two factors are identified for the u. s. economy: the growth rate of industrial production, ip, and the inflation rate, ir. ip is expected to be 4% and ir 6%. a stock with a beta of 1.0 on ip and .4 on ir currently is expected to provide a rate of return of 14%. if industrial production actually grows by 5%, while the inflation rate turns out to be 7%, what is your best guess for the rate of return on the stock?

This problem has been solved! see the answerwhich of the following statements is correct? the consumer price index is a measure of the overall level of prices, whereas the gdp deflator is not a measure of the overall level of prices. if, in the year 2011, the consumer price index has a value of 123.50, then the inflation rate for 2011 must be 23.50 percent. compared to the gdp deflator, the consumer price index is the more common gauge of inflation. the consumer price index and the gdp deflator reflect the goods and services bought by consumers equally well.