An analyst uses a three-factor arbitrage pricing theory (APT) model to evaluate the expected return of stock BBZ. There are three ETFs available to the analyst, each of which represents a single factor. Each ETF has a factor beta of 1 to that factor and a factor beta of 0 to all other factors. The analyst prepares the following information:

	Factor P	Factor Q	Factor R
Expected annual return of ETF factor	5.4%	6.8%	3%
Factor beta for stock BBZ	0.95	-0.40	1.20

If the annualized risk-free interest rate is 2.10% and stock BBZ has an alpha of 0.50%, what is the expected annual return on stock BBZ using the internal model?