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Consider a three-factor APT model. The factors and associated risk premiums are: Factor Risk Premium Change in groso national product (CNP) +6.7 Change in energy

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Consider a three-factor APT model. The factors and associated risk premiums are: Factor Risk Premium Change in groso national product (CNP) +6.7 Change in energy prices 1.0 Change in long-term interest rates +3.4 Calculate expected rates of return on the following stocks. The risk-free interest rate is 71% 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 (.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 (6 = 24) 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 of b--1.3 to the energy foctor (The aluminum company is energy-intensive and suffers when energy prices rise) (Enter your answer as a percent rounded to 2 decimal places.) % % b Expected rate of totum Expected rate of retum Expected rate of retum Expected role of retum d

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