(2) What are the certainty-equivalent cash flows in each year?

5. Consider a three-factor APT model. The factors and associated risk premiums are: A stock with average exposure of b=1.5 to changes in GNP and long-term interest rates, but negative exposure of b= -2.5 to the energy factor. With the risk-free interest rate is 4%, please calculate expected rate of return on the stock. (本題共5分)