Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following table shows the sensitivity of four stocks to the three Fama-French factors. Assume the interest rate is 2%, the expected risk premium on

image text in transcribed

The following table shows the sensitivity of four stocks to the three Fama-French factors. Assume the interest rate is 2%, the expected risk premium on the market is 5%, the expected risk premium on the size factor is 2.8%, and the expected risk premium on the book- to-market factor is 4.6%. Market Size Book-to-market Ford 1.35 -0.18 0.75 Walmart 0.76 -0.45 -0.36 Citigroup 1.16 -0.43 0.96 Apple 1.36 -0.56 -0.61 Calculate the expected return on each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Ford Walmart Citigroup Apple Expected return % % % %

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

Sport Finance

Authors: Gil Fried, Timothy D. DeSchriver, Michael Mondello

4th Edition

1492559733, 978-1492559733

More Books

Students also viewed these Finance questions

Question

Let W(t) be a standard Brownian motion. Find P(0 0).

Answered: 1 week ago