BDO is exposed to the ff. risks - Foreign exchange rate - Debtors' ability to pay - Interest rate movement - Household consumption level - High ratio of older personnel or management during COVID - Number of labor force who were layoff during the period The level of exposure of this bank to 3 systematic factors are 0.50, 0.65, and 0.70. This is a blue-chip company which is included in the PSEi and a reasonable assessment of its sensitivity is to use the 10/31/2019 - 10/31/2020 data. The government on-the-run bond has interest earnings of 3.5% a. With the listed risks, identify the systematic risks from unsystematic risks. b. Using the identified systematic risks calculate the expected return of BDO stock using Arbitrage Pricing Model.