Suppose you are considering the purchase of shares in the XYZ mutual fund. As part of your

Question:

Suppose you are considering the purchase of shares in the XYZ mutual fund. As part of your investment analysis, you regress XYZ's monthly returns for the past five years against the three factors specified in the Fama and French models. This procedure generates the following coefficient estimates: market factor = 1.2, SMB factor = −0.3, HML factor = 1.4. Explain what each of these coefficient values means. What types of is XYZ likely to be holding?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...