Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 09, 2024

Suppose the market follows a Fama-French Three-factor model (FF3), where the market has expected return of 6%,E(rhml) is 2%, and E(rsmb) is 3%. Suppose a

image text in transcribed

Suppose the market follows a Fama-French Three-factor model (FF3), where the market has expected return of 6%,E(rhml) is 2%, and E(rsmb) is 3%. Suppose a stock has market beta of 1.5. HML beta of 2 , and SMB beta of 2.5. Given the risk-free rate is 3%, what is the expected return of this stock

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Securitisation Derivatives A Practioner's Handbook

Securitisation Derivatives A Practioner's Handbook

Authors: Mark Aarons, Vlad Ender, Andrew Wilkinson

1st Edition

1119532272, 978-1119532279

More Books

Students also viewed these Finance questions

Question

★★★★★

Your airplane crashes in the Pacific Ocean. You land on a desert island with one other passenger. A box containing 100 little bags of peanuts also washes up on the island. The peanuts are the only...

Answered: 1 week ago

Question

★★★★★

Does anger level affect the risk of coronary heart disease? An observational study followed a random sample of 8,474 persons for 4 years. Each study participant was classified as either low, moderate...

Answered: 1 week ago

Question

★★★★★

=+22.12. Prove (what is essentially Kolmogorov's zero-one law) that if A is independent of a w-system " and A E o(9), then P(A) is either 0 or 1.

Answered: 1 week ago

Question

★★★★★

Doctors Mobey, Oak, and Chesterfield have been in a group practice for several years. Mobey and Oak are family practice physicians, and Chesterfield is a general surgeon. Chesterfield receives many...

Answered: 1 week ago

Question

★★★★★

Note: All graphs in this asisgnment are simple and undirected. Draw a tree T of 9 vertices { a , b , c , d , e , f , g , h , i } such that the degree of a is 5 , the degree of b is 2 , the degree of...

Answered: 1 week ago

Question

★★★★★

When a Frequency Count is enhanced by adding notes about the triggers, intensity, and duration, it becomes a(n): checklist running record event sampling anecdotal record

Answered: 1 week ago

Question

★★★★★

Figure P33.1 shows eight point sources of light, \(a-h\), and two detectors, A and B. The point sources are evenly spaced, with \(0.10 \mathrm{~m}\) between adjacent sources, and detector A shields...

Answered: 1 week ago

Question

★★★★★

Find the maximum energy (E) stored in the inductor of Example 10.17 (a) and show that it is greater than the sum of the maximum stored energies (E 1 and E 2 ) when each source is applied alone....

Answered: 1 week ago

Question

★★★★★

Consider the system shown in Fig. 9.54 in which a harmonic force acts on the mass \(m\). Derive the condition under which the steady-state displacement of mass \(m\) will be zero. Disc, mass M 000 R...

Answered: 1 week ago

Question

★★★★★

Verify the color SU(3) representations for combinations of three or fewer quarks and antiquarks given in Eq. (19.28). Data from Eq. 19.28 qq=303=108 qq 3 3 603, 999 3 3 3 = 36315, qqq 3 3 3 1088 10,

Answered: 1 week ago

Question

★★★★★

In about the years 214-212 BC, the Greek philosopher and scientist Archimedes is said to have repelled a Roman attack with a "death-ray" converging mirror, using sunlight to set the approaching fleet...

Answered: 1 week ago

Question

★★★★★

6. Identify seven types of hidden histories.

Answered: 1 week ago

Question

★★★★★

10. Describe a dialectic perspective in negotiating personal histories.

Answered: 1 week ago

Question

★★★★★

What is the relationship between humans and nature?

Answered: 1 week ago

Previous Question Next Question