# Consider a three-factor APT model. The factors and associated risk premiums

Consider a three-factor APT model. The factors and associated risk premiums are:FactorRisk Premium (%)Change in GNP+6.9Change in energy pricesâ1.2Change in long-term interest rates+3.6Calculate expected rates of return on the following stocks. The risk-free interest rate is 4.1%.a. A stock whose return is uncorrelated with all three factors. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)Expected rate of return %b. A stock with average exposure to each factor (i.e., with b = 1 for each). (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)Expected rate of return %c. A pure-play energy stock with high exposure to the energy factor (b = 2.2) but zero exposure to the other two factors. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)Expected rate of return %d. An aluminum company stock with average sensitivity to changes in interest rates and GNP, but negative exposure of b = â1.5 to the energy factor. (The aluminum company is energy-intensive and suffers when energy prices rise.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)Expected rate of return %