$1.$Suppose a three$-$factor model is appropriate to describe the returns of a stock.

Information about those three factors is presented in the following chart:

a$.$ Analyze is the systematic risk of the stock return? $($A negative answer should

be indicated by a negative sign. Do not round intermediate calculations

and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

$m={}_{GNP}GNP+{}_{\text{I}\text{n}\text{f}\text{l}\text{a}\text{t}\text{i}\text{o}\text{n}}$ Inflation $+{}_r$ Interest rates

b$.$ Suppose unexpected bad news about the firm was announced that causes the

stock price to drop by $1\mathrm{.}4$ percent. If the expected return on the stock is $13\mathrm{.}5$

percent, how can you calculate the total return on this stock? $($Do not round

intermediate calculations and enter your answer as a percent rounded to

$2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$R=R^{-}+m+$