1) According to a recent regression result, you find that GM stock has a market beta of 1.6, size beta of 0.3 and value beta of 0.75. Use Fama-French 3 factor model to find the expected return for GM stock. (assuming 7% market risk premium, 3% riskfree rate, 2% return premium for small-cap stocks (ie., size risk premium), and 1.5% return premium for value stocks (i.e., value stock premium)) Three-Factor Model Identify macroeconomic factors that could affect stock returns Estimate expected risk premium on each factor (rfactorl - rf, etc.) Measure sensitivity of each stock to factors (b1, b2, etc.)