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Suppose that three stocks (A,B, and C) and two common risk factors ( 1 and 2) have the following relationship: E(RA)=(1.0)1+(0.7)2E(RB)=(0.7)1+(0.6)2E(RC)=(0.4)1+(0.5)2 a. If 1=4% and 2=6%, what are the prices expected next year for each of the stocks? Assume that all three stocks currently sell for $20 and will not pay dividend in the next year. Do not round intermediate calculations. Round your answers to the nearest cent. Expected price for Stock A: \$ Expected price for Stock B: \$ Expected price for Stock C: \$ b. Suppose that you know that next year the prices for Stocks A, B, and C will actually be $30.55, $33.85, and $30.50 Assume that you can use the proceeds from any necessary short sale. Determine the riskless, arbitrage investment to take advantage of these mispriced securities. In order to create a riskless arbitrage investment, an investor would a riskless arbitrage investment. What is the profit from your investment? Round your answer to the nearest cent. $ Suppose that three stocks (A,B, and C) and two common risk factors ( 1 and 2) have the following relationship: E(RA)=(1.0)1+(0.7)2E(RB)=(0.7)1+(0.6)2E(RC)=(0.4)1+(0.5)2 a. If 1=4% and 2=6%, what are the prices expected next year for each of the stocks? Assume that all three stocks currently sell for $20 and will not pay dividend in the next year. Do not round intermediate calculations. Round your answers to the nearest cent. Expected price for Stock A: \$ Expected price for Stock B: \$ Expected price for Stock C: \$ b. Suppose that you know that next year the prices for Stocks A, B, and C will actually be $30.55, $33.85, and $30.50 Assume that you can use the proceeds from any necessary short sale. Determine the riskless, arbitrage investment to take advantage of these mispriced securities. In order to create a riskless arbitrage investment, an investor would a riskless arbitrage investment. What is the profit from your investment? Round your answer to the nearest cent. $