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Consider the following simplified APT model: Factor Market Interest rate Yield spread Expected Risk Premium (%) 6.8 -0.6 4.7 Stock Market (61) 1.0 0.9 0.3

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Consider the following simplified APT model: Factor Market Interest rate Yield spread Expected Risk Premium (%) 6.8 -0.6 4.7 Stock Market (61) 1.0 0.9 0.3 Factor Risk Exposures Interest Rate Yield Spread (62) (63) -1.2 -0.4 0.2 1.4 1.3 Calculate the expected return for each of the stocks shown in the table above. Assume rf=3.4%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return P Expected return P2 Expected return P3

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