Question

Suppose a three-factor model is appropriate to describe the returns of a stock. Information about those three factors is presented in the following chart: What is the systematic risk of the stock return

Answer 1

Answer:

The answer is "$6.33\%$"

Explanation:

The systematic portion of the return can be defined as follows:

$\to 0.0000734(\ 17,863?\ 17,034)?0.90(2.60\%?2.80\%)?0.32(3.50\%?3.70\%)$

$= 0.0000734 (829) - .90 (-.002) - .32(-.002)\\\\= 0.0608486 + 0.0018 + 0.00064\\\\= 0.0633 \\\\ = 6.33\%$