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An analyst has estimated the following factor loadings and fator premiums for a stock: Suppose that the long-run risk-free return is 3%. What is the
An analyst has estimated the following factor loadings and fator premiums for a stock: Suppose that the long-run risk-free return is 3%. What is the expected return for the stock according to the CAPM and Fama-French 3-factor model (1 Mark)? Explain the meanings of the size and value factors in the Fama-French 3 factor model and how they are constructed ( 2 Marks)
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