Given a three-factor arbitrage pricing theory APT model, what is the expected return on the Freedom Fund?
- The factor risk premiums to factors 1, 2, and 3 are 10%, 7% and 6%, respectively.
- The Freedom Fund has sensitivities to the factors 1, 2, and 3 of 1.0, 2.0 and 0.0, respectively.
- The risk-free rate is 6.0%.
A. 24.0%.
B. 33.0%.
C. 30.0%.
D. 36.0%.
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