Problem 12-4 Multifactor Models The risk premiums for the factors are 6.2 percen
ID: 2753304 • Letter: P
Question
Problem 12-4 Multifactor Models
The risk premiums for the factors are 6.2 percent, 5.4 percent, and 5.8 percent, respectively. You create a portfolio with 30 percent invested in Stock A , 30 percent invested in Stock B , and the remainder in StockC.
What is the expression for the return on your portfolio? (Round your answers to 2 decimal places. (e.g., 32.16))
If the risk-free rate is 3.3 percent, what is the expected return on your portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Suppose stock returns can be explained by the following three-factor model:
Explanation / Answer
Problem 12-4 Multifactor Models The risk premiums for the factors are 6.2 percen