Suppose a three factor model is appropriate to describe the returns of a stock Information about those three factors is presented in the following chart Factor Expected Value Actual Value GDP 0008381 $14,206 $14,190 Inflation 88 3 7 3 5 Interest rates 45 6 8 6 6 a What is the systematic risk of the stock return (A negative answer should be indicated by a negative sign Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e g , 32 16 ) b Suppose unexpected bad news about the firm was announced that causes the stock price to drop by 1 1 percent If the expected return on the stock is 13 7 percent, what is the total return on this stock (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e g , 32 16 )

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Suppose a three-factor model is appropriate to describe the returns of a stock. Information about those three factors is presented in the following chart: Factor

Suppose a three-factor model is appropriate to describe the returns of a stock. Information about those three factors is presented in the following chart:

Factor		Expected Value		Actual Value
GDP	.0008381		$14,206		$14,190
Inflation	.88		3.7%		3.5%
Interest rates	.45		6.8%		6.6%

a.	What is the systematic risk of the stock return? (A negative answer should be indicated by a negative sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b.	Suppose unexpected bad news about the firm was announced that causes the stock price to drop by 1.1 percent. If the expected return on the stock is 13.7 percent, what is the total return on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)