In the Fama-French 3-factor model, suppose the factor risk premiums (in % year) are as follows: Factor Risk Premium Factor Market Risk- free rate Beta for the Portfolio 5.0% Market Risk- free rate SMB The estimated factor betas for a portfolio of large agriculture companies are: 1.1 3.0% SMB HML -0.7 7.0% HML 0.9 According to this 3-factor model, what is the expected excess return for this portfolio of agriculture companies? When performing the calculations, do not round any inputs or interim results until you get the final answer. Round your final answer to four places after the decimal point.

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Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.