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The Market Return Is 12% and the Risk Free Rate

question 38

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The market return is 12% and the risk free rate is 4%. Smallish Inc. has a market beta of 0.9, a SMB beta of 0.65, and a HML beta of .52. If the risk premium on HML and SMB are both 2%, using the Fama-French Three Factor Model, what is the expected Return on Smallish Inc. stock?


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Working Self-concept

The part of one's self-identity that is actively present in consciousness at any given time, shaped by the situation and social interactions.

Reticular Activating System

A network of neurons located in the brainstem that is responsible for regulating wakefulness and sleep-wake transitions.

Extraversion/Introversion

A personality dimension reflecting the extent to which an individual is outgoing and enjoys interacting with the external world versus being introspective or reserved.

Person/Situation Debate

A discussion in psychology about the relative influence of personal characteristics versus situational factors in determining behavior.

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