Suppose the risk free rate rf = 1%, the market risk premium is E(rM) -...
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Suppose the risk free rate rf = 1%, the market risk premium is E(rM) - rf = 5%, and the risk premiums on SMB and HML are 2% and 3%, respectively. Further assume that a stock's market factor beta, SMB factor beta, and HML factor beta are 1.0, 1.5, and -1.3, respectively. According to Fama-French 3-factor model, the expected return on this stock is
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