you have been a sign the task of estimating the expected returns for three different stocks: QRS TUV and WXY. your preliminary analysis has established the historical risk premiums associated with three risk factors that could potentially be included in your calculations the excess return on a proxy for the market portfolio, and two variables capturing general macroeconomic exposure these values are: MKT=7.2% MACRO1=-.3% and MACRO2=.4%. YOU HAVE ALSO ESTIMATED THE FOLLOWING FACTOR BETAS FOR ALL THREE STOCKS WITH RESPECT TO EACH OF THESE POTENTIAL RISK FACTORS

calculate expected returns for the three stocks using just the MKT risk factor. assume a risk free rate of 4.1% round your answers to three decimal places.

calculate the expected returns from stocks using all three risk factors and the same 4.1% risk free rate. round your answers to three decimal places.

You have been assigned the task of estimating the expected returns for three different stocks: QRS, TUV, an WXY. Your preliminary analysis has established the historical risk premiums associated with three risk factors that could potentially be included in your calculations: the excess return on a proxy for the market portfolio (MKT), and two variables capturing general macroeconomic exposures (MACRO1 and MACRO2). These value- are: MKT - 7.2%, AMACRO1 -0.3%, and AMACRO2 0.4%. You have also estimated the following factor betas (i.e., loadings) for all three stocks with respect to each of these potential risk factors: FACTOR LOADING Stock MKT MACRO1 MACRO2 QRS 1.15 -0.49 0.00 TUV 0.85 0.53 0.30 WXY 1.06 -0.13 0.00 a. Calculate expected returns for the three stocks using just the MKT risk factor. Assume a risk-free rate of 4.1%. Round your answers to three decimal places. Expected return for stock QRS: % Expected return for stock TUV: % Expected return for stock WXY % b. Calculate the expected returns for the three stocks using all three risk factors and the same 4.1% risk free rate. Round your answers to three decimal places. Expected return for stock QRS: % Expected return for stock TUV: % Expected return for stock WXY: X %