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The following table shows the sensitivity of four stocks to the three Fama-French factors. Assuming that the interest rate is 4%, the expected risk premium
The following table shows the sensitivity of four stocks to the three Fama-French factors. Assuming that the interest rate is 4%, the expected risk premium on the market is 7%, the expected risk premium on the size factor is 2.6%, and the expected risk premium on the book-to-market factor is 4.4%.
Ford | Walmart | Citigroup | Apple | |
---|---|---|---|---|
Market | 1.37 | 0.80 | 1.18 | 1.38 |
Size | 0.20 | 0.43 | 0.45 | 0.58 |
Book-to-market | 0.73 | 0.34 | 0.98 | 0.66 |
Calculate the expected return on each stock. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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