2. Last year the return on Harry Company stock was 5 percent. The portion of the return...

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2. Last year the return on Harry Company stock was 5 percent. The portion of the return on the stock not explained by a two-factor macroeconomic factor model was 3 percent.

Using the data given below, calculate Harry Company stock’s expected return.

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Quantitative Investment Analysis

ISBN: 9781119743620

4th Edition

Authors: CFA Institute

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Question Posted: Oct 28, 2024 03:02 AM

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2. Last year the return on Harry Company stock was 5 percent. The portion of the return...

Question:

Macroeconomic Factor Model for Harry Company Stock Variable Actual Value (%) Expected Value (%) Stock's Factor Sensitivity Change in interest rate Growth in GDP 2.0 1.0 0.0 4.0 -1.5 2.0

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Quantitative Investment Analysis

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