Problem $7-10$

also estimated the following factor betas $($i$.$e$.,$ loadings$)$ for all three stocks with respect to each of these potential risk factors:

FACTOR LOADING

a$.$ Calculate expected returns for the three stocks using just the MKT risk factor. Assume a risk$-$free rate of $4\mathrm{.}3\%.$ 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 $4\mathrm{.}3\%$ 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:

$\%$

c$.$ What sort of exposure might MACRO$2$ represent?