4 Consider a three-factor APT model. The factors and associated risk premiums are: Risk Premium (8) +6.5 0.5 +2.9 Factor Change in gross national product (GNP) Change in energy prices Change in long-term interest rates. Calculate expected rates of return on the following stocks. The risk-free interest rate is 6.8%. a. A stock whose return is uncorrelated with all three factors. (Enter your answer as a percent rounded to 1 decimal place.) b. A stock with average exposure to each factor (i.e., with b=1 for each). (Enter your answer as a percent rounded to 1 decimal place.) c. A pure-play energy stock with high exposure to the energy factor (b= 2.2) but zero exposure to the other two factors. (Enter your answer as a percent rounded to 2 decimal places.) d. An aluminum company stock with average sensitivity to changes in interest rates and GNP, but negative exposure fb-1.5 to the energy factor. (The aluminum company is energy-intensive and suffers when energy prices rise.) (Enter your answer as a percent rounded to 2 decimal places.) a. b. C. d. Expected rate of return Expected rate of return Expected rate of return Expected rate of return % % % %