You have analysed the risk factors in order to calculate the expected returns for the stocks TEM, MTP and DGM. You identified the market risk factor as well as three macro factors. Their excess returns are given as follows: λ_mkt=0.08, λ_macro1=0.06, λ_macro2=0.001, λ_macro3=0.04. The risk-free rate is 0.02. Their factor loadings are summarized in the table.

Stock	MKT	MACRO1	MACRO2	MACRO3
TEM	1.3	-0.2	0.4	0
MTP	0.6	0.1	0	0.3
DGM	0.95	-0.03	0.01	0

Calculate the expected return of the stocks using only the MKT risk factor.

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