Suppose Binder Corporation's Common Stock Has an Actual Return of 12.34

Multiple Choice

Suppose Binder Corporation's common stock has an actual return of 12.34 percent compared to its expected return of 12.6 percent.The risk-free rate was expected to be 4.3 percent,which it was.The beta of F_i is .9 and the beta of F_GNP is 1.1.If inflation unexpectedly increased by 1.4 percent,what was the unexpected change in GNP?

A) 2.02 percent
B) 1.38 percent
C) −.82 percent
D) −1.38 percent
E) −2.02 percent