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An analyst has modeled the stock of a company using a Fama-French three-factor model. The risk-free rate is 3%, the market return is 11%, the return on the SMB portfolio (rSMB) is 3.9%, 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?

Basic Finance, Finance

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