Question: You are evaluating a stock using a multifactor (APT) model of security returns. You have identified the following information on 3 factors. a. If T-bills

 You are evaluating a stock using a multifactor (APT) model of
security returns. You have identified the following information on 3 factors. a.

You are evaluating a stock using a multifactor (APT) model of security returns. You have identified the following information on 3 factors. a. If T-bills currently offer a 5% yield, find the expected rate of return on this stock if the market views the stock as fairly priced. (Do not round intermediate calculations. Round your answer to 1 decimal place.) b. Suppose that the market expects the values for the three macro factors given in column 1 below, but that the actual values turn out as given in column 2 . Calculate the revised expectations for the rate of return on the stock once the "surprises" become known. (Do not round intermediate calculations. Round your answer to 1 decimal place.)

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