Problem 2 - APT Return The estimated parameters of a four-factor APT model are: R - R free = 0.7+(-0.4)F +0.2F2 +0.5F3 +0.1F4. Suppose that the risk free rate is 0.03. Alpha 0.7 b1 b2 I b4 R-free -0.4 0.2 0.5 0.1 0.03 A) If F1 = 0.3, F2 = -0.4, F3 = 0, and F4 = 0.4, what should the return of the stock be? The return should be %. Round your answer to the nearest three decimal places. B) If F1 = 0.3, F2 = 0.4, F3 = -0.3, and F4 = 0.4, what should the return of the stock be? The return should be %. Round your answer to the nearest three decimal places. C) If F1 = -0.2, F2 = 0.2, F3 = -0.1, and F4 = 0.4, what should the return of the stock be? The return should be %. Round your answer to the nearest three decimal places.

The estimated parameters of a four-factor APT model are: RRfree=0.7+(0.4)F1+0.2F2+0.5F3+0.1F4. Suppose that the risk free rate is 0,03 . A) If F1=0.3,F2=0.4,F3=0, and F4=0.4, what should the return of the stock be? The return should be \%. Round your answer to the nearest three decimal places. B) If F1=0.3,F2=0.4,F3=0.3, and F4=0.4, what should the return of the stock be? The return should be \%. Round your answer to the nearest three decimal places. C) If F1=0.2,F2=0.2,F3=0.1, and F4=0.4, what should the return of the stock be? The return should be \%. Round your answer to the nearest three decimal places