The expected return for Stock A can be calculated using the single-factor and multifactor models of risk and return as follows:

1. Baseline Expected Return: The baseline expected return for Stock A is given as 5.0%.

2. Factor Betas: The factor betas for industrial production and interest rate are 1.30 and -0.75, respectively.

3. Baseline Factors: Under the baseline scenario, industrial production growth is 3.0%, and the interest rate is 1.5%.

4. Forecasted Factors: The economic research department forecasts industrial production to grow by 4.2% and interest rates to increase by 25 basis points to 1.75%.

5. Factor Shocks: The "shocks" or changes in factors from the baseline scenario are:

   • Industrial production shock: 4.2% - 3.0% = 1.2%
   • Interest rate shock: 1.75% - 1.5% = 0.25%

6. Calculating New Expected Return: The formula to calculate the new expected return is:

   $$\text{New Expected Return} = \text{Baseline Expected Return} + (\text{Factor Beta} \times \text{Factor Shock})$$

   Plugging in the values:

   $$\text{New Expected Return} = 5\% + (1.3 \times 1.2\%) + (-0.75 \times 0.25\%) = 6.37\%$$

The calculated expected return for Stock A for the next year, based on the forecasted changes in macroeconomic factors, is 6.37%. This corresponds to option B (6.4%), which is the closest to the calculated value. The slight discrepancy between the calculated value and the option provided could be due to rounding during the calculation process.