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Question 16 1 pts You work for AQR, an Austin-based hedge fund. Suppose that the market can be described by the following three sources of
Question 16 1 pts You work for AQR, an Austin-based hedge fund. Suppose that the market can be described by the following three sources of systematic risk with associated risk premiums. Risk Factor Premium Industrial production (1) 6% Interest rates (R) 2% Consumer confidence 4% (C) The return on a particular stock is generated according to the following equation: r = 15% + 1.01 + 0.5R + 0.75C + e Your boss asked you to find the equilibrium rate of return on this stock using the APT. The T-bill rate is 6% O 10% O 15% O 18% O 16%
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