Business
Business, 23.03.2020 16:56, tabithacat3536

Consider the following multifactor (APT) model of security returns for a particular stock.

Factor Factor Beta Factor Risk Premium
Inflation 1.6 6%
Industrial production 1.1 7
Oil prices 0.7 2

a.
If T-bills currently offer a 5% yield, find the expected rate of return on this stock if the market views the stock as fairly priced. (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)

Expected rate of return %

answer
Answers: 2

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Consider the following multifactor (APT) model of security returns for a particular stock.

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