Short Question (SQ.2) (15%) According to your statistical analysis, you found two common macroeconomic risk factors (Factor 1: unexpected GDP growth rate and Factor 2: unexpected inflation rate) in our economy affecting asset retums. You are now going to use these two common macroeconomic factors to analyze the expected returns and realized returns of various portfolios At the beginning of this year (t=O), the expected GDP growth rate over this year is +4.5% and the expected inflation rate over this year is +3.0%. Two well-diversified portfolios X and Y have the following factor sensitivities and expected returns at (t=0); Factor Sensitivity Portfolio Factor 1 Factor 2 Expected Return (0) ETRI +1.20 +1.80 5.0% p.a. +0.60 +1.60 2.8% p.a. The risk-free interest rate is 2% pa. You believe that both portfolios X and Y are correctly priced in accordance with Arbitrage Pricing Theory (APT). (a) You are now going to analyze another two weil diversified portfolios P and Q with the following factor sensitivities: Factor Sensitivity Portfolio Factor 1 Factor 2 (0) (ba) (6) +1.5 P -1.5 +0.8 +1.2 Calculate the expected retums on portfolios P and Q with Arbitrage Pricing Theory (APT) at the beginning of the year (t=0), (10%)