16. The Fama-French three-factor model Aa Aa Consider the following two statements and identify which model each describes: This model relies on only one explanatory factor for a security's (or portfolio's) required return and imposes a large number of restrictive and unrealistic assumptions. This model argues that a security's required return is a function of the market risk premium, the company's size, and the company's book-to-market value ratio. Fama-French three-factor model O Capital Asset Pricing Model Fama-French three-factor model O Capital Asset Pricing Model Julie, an analyst at Avangard Partners (AP), models the stock of the company. Suppose that the risk-free rate rRF 5%, the required market return rM 1090, the risk premium for small stocks rSMB 3.2%, and the risk premium for value stocks rHML = 4.8%. Suppose also that Julie ran the regression for Avangard Partners's stock and estimated the following regression coefficients : aAP = 0.00, bAP = 1.2, CAP-20.4, and dAP =-1.3. If Julie uses a Fama-French three-factor model, then which of the following values correctly reflects the stock's required return? 0-72.52% O-60.52% 0-65.52% 0-50.48%