medium · Principles of Finance risk-return-portfolio
Under the Fama-French Three-Factor Model, a stock has a market beta of 1.2, an SMB loading of 0.5, and an HML loading of -0.3.
If the market premium is 6%, the SMB premium is 2%, and the HML premium is 4%, what is the expected excess return over the risk-free rate?
- 9.4%
- 8.2%
- 7.0%
- 7.2%
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