Question: Estimate the stock return by using APT Model. The particulars are as follows; the expected return of the market is 11 per cent and the

Estimate the stock return by using APT Model. The particulars are as follows; the expected return of the market is 11 per cent and the risk-free rate of interest is 6 per cent.

Factors

Market Price of Risk

Sensitivity Index

Inflation

9%

1.1

Foreign Direct Investment

5%

0.8

Forex Rate

4%

1.0

GDP

5%

0.6

a) 7%

b) 10 %

c) 8.55%

d) None of them

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