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Country X has experienced a high real economic growth rate over a long period, but has reported a relatively low real return on equity. According to Grinold–Kroner, which of the following is most likely the reason for this discrepancy?
A
An increase in the expected repricing term related to the P/E ratios in the market
B
An increase in dilution effects from the privatization of large state-owned enterprises
C
A decrease in the relative dynamism of the economy coming from small-sized and medium-sized entrepreneurial firms
