Q1. You run the following 3-factor model for a stock ret-stock = a + b1 * ret, m

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Q1. You run the following 3-factor model for a stock ret-stock = a + b1 * ret, mkt + b2" value, minus-growth + b3 small_minus_large err, where value_minus_growth is the monthly return difference between a value ETF and a growth ETF, while small_minus large is the monthly return difference between a small cap ETF and a large cap etf. The monthly return of the stock has a standard deviation of 10%. The 3-factor regression has a R^2 of 36%. You identify the coefficients as: a = 1%; b1 = 1.2; b2 = 0.8; b3 = 1.5 a. what is the expected return of the stock given the following realized factors: mkt return = 1%; ll. value outperform growth by 2%; iii, small cap outperform large cap by 1.5% b. what the 90% confidence interval for the expected return in Q1a?

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Q1. You run the following 3-factor model for a stock ret-stock = a + b1 * ret, m

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