Assume the following data for a stock: risk-free rate = 5 percent; beta (market) = 0.75;...

 

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Assume the following data for a stock: risk-free rate = 5 percent; beta (market) = 0.75; beta (size) = 0.5; beta (book-to-market) = 1.5; market risk premium = 7 percent; size risk premium = 5 percent; and book-to-market risk premium = 3.5 percent. Calculate the expected return on the stock using the Fama-French Three-factor Model. Assume the following data for a stock: risk-free rate = 5 percent; beta (market) = 0.75; beta (size) = 0.5; beta (book-to-market) = 1.5; market risk premium = 7 percent; size risk premium = 5 percent; and book-to-market risk premium = 3.5 percent. Calculate the expected return on the stock using the Fama-French Three-factor Model.

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