Financial Economics class.

Reference - Investments by Bodie, Kane and Marcus, 10th edition, but the use of the 9th or 11th edition.

Question 8. In the Fama French 3 factor model, how many total parameter estimates do we need (recall we needed 371 + 2 in the single index model)? Assume the factors are constructed to be orthogonal, that is, the covariances between the factors are zero (so they don't need to be estimated). Question 9. Consider a risky asset that pays out $50 with probability g and $100 with probability %. The risk-free return is 5%. If I told you the risk premium of this asset was 20%, what must the price of the asset be