a Suppose that a market can be described by the following three sources of systematic risk with associated risk premiums: Inflation factor has a 7% risk premium of its factor portfolio; Interest rate factor has a 2% risk premium of it factor portfolio; and War factor has a 16% risk premium of its factor portfolio. The return on a particular well-diversified portfolio P is generated according to the following equation 40% + 1.01 +0.3R +1.5W where I, R, and Ware unanticipated components in Inflation, Interest rate, and War, respectively. (6 points) 1. Find the expected rate of return of this portfolio using the APT. The T-bill rate is 7%. Is the stock overpriced or underpriced? 2. Is there any arbitrage opportunity? If so, construct one arbitrage strategy