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You are evaluating a stock using a multifactor (APT) model of security returns. You have identified the following information on 3 factors. a. If T-bills
You are evaluating a stock using a multifactor (APT) model of security returns. You have identified the following information on 3 factors. a. If T-bills currently offer a 8% yield, find the expected rate of return on this stock if the market views the stock as fairly priced. (Do not round intermediate calculations. Round your answer to 1 decimal place.) b. Suppose that the market expects the values for the three macro factors given in column 1 below, but that the actual values turn out as given in column 2. Calculate the revised expectations for the rate of return on the stock once the "surprises" become known. (Do not round intermediate calculations. Round your answer to 1 decimal place.)
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