Consider the three stocks, stock X, stock Y, and stock Z, that have the following...
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Finance
Consider the three stocks, stock X, stock Y, and stock Z, that have the following factor loadings (or factor betas).
Stock
Factor 1 Loading
Factor 2 Loading
X
-0.1
0.85
Y
0.35
0.5
Z
-0.55
1.2
The zero-beta return (0) = 3.25 percent, and the risk premia are 1 = 10 percent and 2 = 8 percent. Assume that all three stocks are currently priced at 50 Baht.
The expected returns for stock X, stock Y, and stock Z are ______%, ______%, and ______%, respectively.
(DO NOT round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.00). Do not include the percentage sign (%).)
The expected prices one year from now for stocks X, Y, and Z are ______ , ______ , ______, respectively.
(DO NOT round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.00). Do not include the percentage sign (%).)
If you know that the actual prices one year from now are stock X 55 Baht, stock Y 52 Baht, and stock Z 57 Baht, then you would ______ stock X, ______ stock Y, and ______stock Z.
(Answer buy or sell.)
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