Consider a three-factor APT model. The factors and associated risk premiums are:

Factor	Risk Premium (%)
Change in GNP	+5.3
Change in energy prices	1.3
Change in long-term interest rates	+2.3

Calculate expected rates of return on the following stocks. The risk-free interest rate is 4.5%.

a. A stock whose return is uncorrelated with all three factors. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Expected rate of return %

b. A stock with average exposure to each factor (i.e., with b = 1 for each). (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Expected rate of return %

c. A pure-play energy stock with high exposure to the energy factor (b = 1.7) but zero exposure to the other two factors. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Expected rate of return %

d. An aluminum company stock with average sensitivity to changes in interest rates and GNP, but negative exposure of b = 1.2 to the energy factor. (The aluminum company is energy-intensive and suffers when energy prices rise.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Expected rate of return %