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Suppose you identified three important systematic risk factors given by exports,inflation,and industrial production.At the beginning of the year,a firm's stock return is estimated at 9.6 percent and the growth in the three factors is estimated at −1 percent,2.5 percent,and 3.5 percent,respectively.The factor betas are: βEX = 1.8,βI = .7,and βIP = 1.What would be the stock's total return if the actual growth in each of the factors was equal to the expected growth and no unexpected company news occurred?
Confidence Interval
A span of values, taken from sample statistics, seen as likely to encase the value of an unidentified population parameter.
Confidence Level
The probability, expressed as a percentage, that a parameter lies within a specified range of values (confidence interval).
Population Mean
The average value of a property in a population.
Confidence Interval
A range of values, derived from the sample data, that is likely to contain the value of an unknown population parameter, with a certain degree of confidence.
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