Question: Problem 6-4 Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 5%, the

Problem 6-4 Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 5%, the market return is 9%, the return on the SMB portfolio (rsme) is 2.1%, and the return on the HML portfolio (THML) is 5.1%. If a; - 0, b; - 1.2, C = -0.4, and di- 1.3, what is the stock's predicted return? Round your answer to two decimal places

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Fama-French Three-Factor Model An analyst has modeled the stock of a company using the Fama French three-factor model. The market return is the return on the SMB portfolio (rss) is 2.6%, and the...

eBook Problem 6-04 Fama-French Three-Factor Model An analyst has modeled the stock of a company using the Fama French three factor model. The market retum is 12% the retum on the SMB pottle 3 1%...

Problem 2-2. Show all work and formulas. Portfolio Beta Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a beta of 0.7, and $35,000 is invested in a...

Answer Question 2; parts 1-4 and please show all work: 2. Part 1... Portfolio Beta Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a beta of 0.7, and...

Problem 6-4 Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 5%, the market return is 11%, the return on the...

Fama-French Three-Factor Model An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB port- folio (MB) is 3.2%, and...

Problem 6-4 Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 4%, the market return is 10%, the return on the...

Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 5%, the market return is 9%, the return on the SMB portfolio...

Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 5%, the market return is 12%, the return on the SMB...

Fama-French Three-Factor Model An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 3%, the market return is 10%, the return on the SMB...

Plasketts binary system consists of two stars that revolve in a circular orbit about a center of mass midway between them. This means that the masses of the two star are equal (Fig. P13.13). Assume...

Gabrielle Osmon's regular hourly wage rate is $14, and she receives a wage of 112 times the regular hourly rate for work in excess of 40 hours. During a March weekly pay period, Gabrielle worked 44...

6. Write instructions that first clear bits 0 and 1 in AL. Then, if the destination operand is equal to zero, the code should jump to label L3. Otherwise, it should jump to label L4.

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...