Suppose stock returns can be explained by the following three-factor model: Ri = RF + 1F1 + 2F2 3F3 Assume there is no firm-specific risk. The information for each stock is presented here

	1	2	3
Stock A	1.65	.55	.10
Stock B	.82	1.35	.30
Stock C	.75	.18	1.20

The risk premiums for the factors are 6.3 percent, 5.5 percent, and 5.9 percent, respectively. You create a portfolio with 20 percent invested in Stock A , 20 percent invested in Stock B , and the remainder in Stock C.

What is the expression for the return on your portfolio? (Round your answers to 2 decimal places. (e.g., 32.16))

Factor Beta
Factor F1 _____
Factor F2 ______
Factor F3 ______

If the risk-free rate is 3.4 percent, what is the expected return on your portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Expected return______________________

%