Question: Consider a three-factor APT model in which each factor portfolio has an expected return of 8%. If the expected excess return for a stock with

Consider a three-factor APT model in which each factor portfolio has an expected return of 8%. If the expected excess return for a stock with factor betas of 1.4, 0.5, and 0.6 is 5.85%, determine the annual effective risk-free rate.

0.028

0.032

0.035

0.057

0.152

Please show the work for this problem please

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