Question: Pls solve Consider a three factor model given as: E(n)=risk-free rate+b1 Excess return of F1+62 Excess return of F2+b3 Excess return of F3. Consider that

Pls solve Consider a three factor model given as: E(n)=risk-free rate+b1

Pls solve

Consider a three factor model given as: E(n)=risk-free rate+b1 Excess return of F1+62 Excess return of F2+b3 Excess return of F3. Consider that F1=17%, F2=9%, F3=14% and risk-free rate is 6%. There is a fund with an expected return of 29% and b1=0.7, b2=0.9 and b3=1.1. What can we say regarding the pricing of this fund? Mention the arbitrage strategy (with weights) and arbitrage profit? [2]

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