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Business, 07.12.2021 03:00 Kikilcaro9675

Suppose that the market can be described by the following three sources of systematic risk with associated risk premiums. FactorRisk Premium
Industrial Production (l)8%
Interest Rates (R)5
Consumer Confidence (C)7
The return on a particular stock is generated according to the following equation:
r = 19% + 0.7I + 0.4R + 0.60C + e
Find the equilibrium rate of return on this stock using the APT. The T-bill rate is 8%. (Do not round intermediate calculations.

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