1.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 3.7%, and the return on the HML portfolio (rHML) is 5.3%. 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.

2

The market and Stock J have the following probability distributions:

Probability		rM		rJ
	0.3	16	%	22	%
	0.4	8		7
	0.3	20		11

1. Calculate the expected rate of return for the market. Round your answer to two decimal places.

   %

   Calculate the expected rate of return for Stock J. Round your answer to two decimal places.

   %

2. Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places.

   %

   Calculate the standard deviation for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.

   %