Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 3.1%, and the expected risk premium on the book-to-market factor is 4.3%. Market Size Book-to-market Ford 1.38 -0.21 0.72 Ford Walmart Citigroup Apple Walmart 0.82 -0.42 -0.33 Expected return % % % % Citigroup 1.19 -0.46 0.99 Apple 1.39 Calculate the expected return on each stock. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. -0.59 -0.72
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started