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VARVARA [1.3K]
3 years ago
7

An analyst has modeled the stock of a company using the Fama French three factor model The market return is 11 the return on the

SMB portfolio rSMB is 3.0 and the return on the HML portfolio HML is 5.5 If ai 0 bi 1.2 ci 0.4 and di 1.3 what is the stock's predicted return Do not round intermediate calculations Round your answer to two decimal places
Business
1 answer:
MissTica3 years ago
7 0

Answer:

Stock return = 18.15%

Explanation:

As given:

Risk free rate = 3%

Market return = 11%

SMB = 4%

HML = 5.5%

Alpha = 0

Beta = 1.2

CiCi = -0.4

DiDi = 1.3

Computation:

Stock return can be calculated as follow:

Stock return = Risk free rate + Beta * (Market return - Risk free rate) + CiCi * SMB + DiDi * HML + Alpha

Stock return = 3% + 1.2 * (11% - 3%) + (-0.4) * 4% + 1.3 * 5.5% + 0

Stock return = 3% + 9.6% - 1.6% + 7.15% + 0

Stock return = 18.15%

Hence, Predicted stock return is 18.15%.

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Describe the parliamentary meeting procedure and its purpose.
Sati [7]

Answer: Only one issue is discussed at a time

Members have equal and basic rights (vote, oppose and heard)

Minority rights are protected

Explanation:

The parliamentary meeting procedure is as follows;

- Only one issue is discussed at a time

- Members have equal and basic rights (vote, oppose and heard)

- Minority rights are protected

- The chairman authorizes anyone to speak

- The chairperson is impartial.

- Votes decides decisions

- Every member on the floor can contribute

The purpose;

They are rules to ensure businesses are operated in the right order

6 0
3 years ago
Teams and groups tend to have very rigid rules and consequences. True or false
mr Goodwill [35]
That statement is true

A team or a group usually formed based on one similar goals or point of views among the members and a lot of them set up a couple of rules to be imposed among their members to prove that they're committed to the group and its cause.
8 0
3 years ago
Read 2 more answers
Consider the following information attributed to the material management departmentBudgeted usage of materials-handling labor-ho
drek231 [11]

Answer:

a. $75 an hour for a total of $32,250

Explanation:

The computation of the allocation rate and how much cost is to be allocated is shown below:

Fixed cost per hour = $146,200 ÷ 3,400 hours = $43

Variable cost per hour = $32

So, the total cost per hour equal to

= Fixed cost per hour + Variable cost per hour

= $43 + $32

= $75

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4 0
4 years ago
The resources in the input market come from
Yuki888 [10]

Answer:

D

Explanation:

4 0
4 years ago
According to proponents of the efficient-market hypothesis, the best strategy for a small investor with a portfolio worth $40,00
viktelen [127]

Answer:

E. Invest in mutual funds.

Explanation:

Individual investors tend to have relatively small portfolios and are usually unable to realize economies of size. The best strategy is to pool funds with other small investors and allow professional managers to invest the funds. Here, a fund manager is hired to invest the cash the investors have contributed, and the fund manager's goal depends on the type of fund; a fixed-income fund manager, for example, would strive to provide the highest yield at the lowest risk.

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