Question: Assuming r = .03 be the yearly risk-free rate. On the basis of the following table Average monthly return (%) MSFT XOM GE .65

Assuming r = .03 be the yearly risk-free rate. On the basis

Assuming r = .03 be the yearly risk-free rate. On the basis of the following table Average monthly return (%) MSFT XOM GE .65 1.06 0.78 1.29 .23 -0.62 -0.39 .39 0.21 0.82 .68 0.32 -0.22 Factor MKT (TM-TI) SMB HML PRIYear -0.45 -0.12 -0.06 a) Find the monthly and annual total risk premium for each stock b) What is the annual expected rate of return?

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