Refer to the following information. Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (λ₀) = 0.025 and the risk premiums for the two factors are (λ₁) = 0.12 and (λ₀) = 0.10.
Stock Factor 1 b_i1 Factor 2 b_i2
Calculate the expected returns for stocks A, B, C.
A B C

Question

Refer to the following information. Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (λ₀) = 0.025 and the risk premiums for the two factors are (λ₁) = 0.12 and (λ₀) = 0.10.
Stock Factor 1 b_i1 Factor 2 b_i2

Refer to the following information. Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (λ<sub>0</sub>) = 0.025 and the risk premiums for the two factors are (λ<sub>1</sub>) = 0.12 and (λ<sub>0</sub>) = 0.10. Stock Factor 1 b<sub>i1</sub> Factor 2 b<sub>i2</sub> Calculate the expected returns for stocks A, B, C. A B C A) 0.082 0.091 0.033 B) 0.105 0.109 0.032 C) 0.132 0.128 0.033 D) 0.165 0.121 0.032 E) 0.850 0.850 0.610

Calculate the expected returns for stocks A, B, C.
A B C

Quizplus · Accepted Answer

The Answer of Refer to the following information. Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (λ₀) = 0.025 and the risk premiums for the two factors are (λ₁) = 0.12 and (λ₀) = 0.10. Stock Factor 1 b_i1 Factor 2 b_i2 Calculate the expected returns for stocks A, B, C. A B C A) 0.082 0.091 0.033 B) 0.105 0.109 0.032 C) 0.132 0.128 0.033 D) 0.165 0.121 0.032 E) 0.850 0.850 0.610

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