Using the factor beta estimates in the table shown here and the monthly expected return estimates in

Question:

Using the factor beta estimates in the table shown here and the monthly estimates in Table 13.1, calculate the risk premium of General Electric stock (ticker: GE) using the FFC factor specification. (Annualize your result by multiplying by 12.) GE€™s CAPM beta over the same time period was 1.33. How does the risk premium you would estimate from the CAPMcompare?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...