An analyst has modeled the stock of a company using a Fama-

French three-factor model and has estimated that a_i = 0, b_i = 0.7, c_i = 1.2, and d_i = 0.7. Suppose that the daily risk-free rate is approximately equal to zero, the market return is 11%, the return on the SMB portfolio is 3.2%, and the return on the HML portfolio is 4.8% on a particular day. The stock had an actual return of 16.9%

on that day. What is the stock’s predicted return for that day?

(14.9%) What is the stock’s unexplained return for the day?