Suppose a factor model is appropriate to describe the returns on a stock. The current expected return on the stock is 10

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Suppose A Factor Model Is Appropriate To Describe The Returns On A Stock The Current Expected Return On The Stock Is 10 1 (74.29 KiB) Viewed 40 times

Suppose a factor model is appropriate to describe the returns on a stock. The current expected return on the stock is 10.3 percent. Information about those factors is presented in the following chart: Factor Expected B Actual Value Value Growth in 1.68 GNP 2.3% 2.8% Inflation -1.34 4.5 5.0 a. What is the systematic risk of the stock return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Systematic risk of the stock return % b. The firm announced that its market share had unexpectedly increased from 21 percent to 25 percent. Investors know from past experience that the stock return will increase by 55 percent for every 1 percent increase in its market share. What is the unsystematic risk of the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Unsystematic risk of the stock % return c. What is the total return on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Total return on this stock %