An analyst has modeled the stock of a company using the Fama - French three - factor model. The market return is 8 %, the return on the SMB portfolio ( rSMB) is 2.8%, and the return on the HML portfolio (rHML) is 5.6 %. If ai = 0, bi = 1.2, ci = -0.4, and di = 1.3, what is the stock's predicted return? Do not round intermediate calculations. Round your answer to two decimal places. %
An analyst has modeled the stock of a company using the Fama - French three - factor model. The market return is 8 %, the return on the SMB portfolio ( rSMB) is 2.8%, and the return on the HML portfolio (rHML) is 5.6 %. If ai = 0, bi = 1.2, ci = -0.4, and di = 1.3, what is the stock's predicted return? Do not round intermediate calculations. Round your answer to two decimal places. %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 4P: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market...
Related questions
Question
![An analyst has modeled the stock of a company using the Fama - French three
- factor model. The market return is 8 %, the return on the SMB portfolio (
rSMB) is 2.8%, and the return on the HML portfolio (rHML) is 5.6 %. If ai
= 0, bi = 1.2, ci = -0.4, and di = 1.3, what is the stock's predicted
return? Do not round intermediate calculations. Round your answer to two
decimal places. %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5ce6fdd0-8bae-4aab-9594-5ffee54036eb%2Fa6d44a93-770d-4f69-a59f-987172b148cf%2Fatwudo0g_processed.png&w=3840&q=75)
Transcribed Image Text:An analyst has modeled the stock of a company using the Fama - French three
- factor model. The market return is 8 %, the return on the SMB portfolio (
rSMB) is 2.8%, and the return on the HML portfolio (rHML) is 5.6 %. If ai
= 0, bi = 1.2, ci = -0.4, and di = 1.3, what is the stock's predicted
return? Do not round intermediate calculations. Round your answer to two
decimal places. %
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