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Question The estimated factor sensitivities of Renewable Energy Corp. to Fama-French factors and the risk premia associated with those factors are given in the table
Question The estimated factor sensitivities of Renewable Energy Corp. to Fama-French factors and the risk premia associated with those factors are given in the table below: Factor Factor Sensitivity Risk Premium (%. Market factor 1.17 4.5 Size factor 0.58 2.7 Value factor 0.40 4.3 a) Based on the Fama-French model, calculate the required return for Renewable Energy Corp. using these estimates. Assume that the one-month Treasury bill rate is 2.2% b) Describe the expected style characteristics of Renewable Energy Corp. based on its factor sensitivities
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