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Consider the following multifactor (arbitrage pricing theory) model of security returns for a particular stock. Factor Factor Beta Factor risk premium General price level

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Consider the following multifactor (arbitrage pricing theory) model of security returns for a particular stock. Factor Factor Beta Factor risk premium General price level 1.3 7 Industry capacity 0.6 9 Petroleum 0.4 4 If T-Bills currently offer a 7% yield, find the expected rate of return on this stock if the market views the stock as fairly priced.

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