Suppose there are three systematic risk factors

Question: 1. Suppose there are three systematic risk factors

1. Suppose there are three systematic risk factors in the market, what is the expected return of the stocks described below? The risk-free rate is 3%

Risk	Risk Premium	A Betas	B Betas
Industrial Production (IP)	5%	1.2	-0.6
Interest Rates (IR)	6%	-0.8	1.3
Credit Risk (CR)	9%	0.9	1.9

2. If over the course of the year stock A higher a superstar CEO, resulting in a 2% increase, while B experienced a fire which resulted in a 3% loss. Additionally, the actual IP return was 10%, IR was 8%, and CR was 13%. What are the stocks actual returns over the year? Please Show Work!