An analyst has modeled the stock of a company using a


Fama-French Three-Factor Model

An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 4%, the market return is 10%, the return on the SMB portfolio (rSMB) is 3.6%, and the return on the HML portfolio (rHML) is 5.4%. If ai = 0, bi = 1.2, ci = - 0.4, and di = 1.3, what is the stock's predicted return? Round your answer to two decimal places.

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Financial Management: An analyst has modeled the stock of a company using a
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