The following table shows the sensitivity of four stocks to the three Fama?French factors in the five

Question:

The following table shows the sensitivity of four stocks to the three Fama?French factors in the five years to 2001. Estimate the expected return on each stock assuming that the interest rate is 3.5 percent, the expected risk premium on the market is 8.8 percent, the expected risk premium on the size factor is 3.1 percent, and the expected risk premium on the book-to-market factor is 4.4 percent. (These were the realized premia from 1928?2000)

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... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...