If the expected rate of inflation was 3% and the actual rate was 6.2%; the systematic response coefficient from inflation, $\beta$_I, would result in a change in any security return of: A) 9.2%. B) 3.2 $\beta$_I%. C) -3.2 $\beta$_I%. D) 3.0%. E) 6.2 $\beta$_I%.

Question

Quizplus · Accepted Answer

The correct answer involves the difference between the actual inflation rate and the expected inflation rate, which is 6.2% - 3% = 3.2%. The systematic response coefficient (represented by the symbol that seems to have been intended but is garbled in the question) would multiply this difference, hence the answer involving "3.2" and the coefficient symbol.

If the Expected Rate of Inflation Was 3% and the Actual