Question
The market return is 14% and the risk-free rate is 3%. Rascals Inc's market beta is 1.0, SMB beta is -.60, and HML beta is
The market return is 14% and the risk-free rate is 3%. Rascals Inc's market beta is 1.0, SMB beta is -.60, and HML beta is -0.85. calculate what is the expected return on Rascal Inc stock if the risk premium of HML and SMB is both 2% using the Fama-French Three Factor Model?
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