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Stocks XY, and have two risk factors with the following beta coefficients. The zero beta return () -0.025 and the risk premiums for the two

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Stocks XY, and have two risk factors with the following beta coefficients. The zero beta return () -0.025 and the risk premiums for the two factors are(ly) - 0.12 and (19) -0.10. Stock Factor 1 bit Factor 2 biz -0.25 1.1 Y -0.05 0.9 z 0.01 0.6 1. Assume that stocks X. Y, and Z never pay dividends, and they are currently trading at $10, $20, and $30, respectively. What is the expected price next year for each stock? 2. Suppose that you know that the estimated prices of stocks X, Y, and Z will be $11.20, 22.18, and $30.80, respectively. Please evaluate these stocks

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