Suppose stock returns can be explained by the following three-factor model:

R_i = R_F + β₁F₁ + β₂F₂ − β₃F₃

Assume there is no firm-specific risk. The information for each stock is presented here:

	β1	β2	β3
Stock A	2.10	1.10	.85
Stock B	.90	1.70	−.30
Stock C	.90	−.47	1.56

What is the expected return on your portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

The risk premiums for the factors are 7.8 percent, 7 percent, and 7.4 percent, respectively. You create a portfolio with 30 percent invested in Stock A, 30 percent invested in Stock B, and the remainder in Stock C. The risk-free rate is 4.9 percent. What is the beta for each factor for the return on your portfolio? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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