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You are given the following data for two risk factors (1 and 2) and two securities (X and Y): ho 0.09 21 0.06 22 0.11

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You are given the following data for two risk factors (1 and 2) and two securities (X and Y): ho 0.09 21 0.06 22 0.11 0.78 bxi bx2 by1 1.6 1.70 by2 2.40 Based on the APT model, compute the expected returns for X and Y Also calculate the expected price of X and Y one year from now given that X and Y are currently priced at Rs. 55 and Rs. 120 (respectively) and are expected to pay a dividend of Rs. 10 and Rs. 18 (respectively) during the coming year. [6]

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