7 Consider the following simplified APT model Expected REK Factor Premium Market 5.9 Interest rate -0. Yield spread 004 Market (1 Factor RIS Exposures Interest rate Vield Spread (3) -0.3 Stock P 2 p 1.7 0. 0.5 Calculate the expected return for each of the stocks shown in the table above. Assume rp 40% (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected retum P Expected return P2 Expected return P3 8 The following table shows the sensitivity of four stocks to the three Fame-French factors. Assume the interest rate is 4%, the expected risk premium on the market is 7% the expected risk premium on the size factor is 3.9% and the expected risk premium on the book to-market factor is 5.5% Ford group Apl Market 0.60 1.00 1.20 5120 -0.10 -0.44 -0.02 Book to market 6.00 -0.00 Calculate the expected return on each stock (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places) Expected Font W Crgroup Apple