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Problem 2.7 (5 pts) The return on stock A is forecasted using the FFC factor specification. You are given the following information: Factor portfolio Beta

Problem 2.7 (5 pts) The return on stock A is forecasted using the FFC factor specification. You are given the following information: Factor portfolio Beta Rate of return Mkt 0.86 0.08 SMB 0.02 0.06 HML -0.21 0.07 PRIYR 0.07 0.05 The annual risk-free rate is 0.03. Find the expected annual return on stock A

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