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Factor Models Suppose a factor model is appropriate to describe the returns on a stock. The...

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Finance

Factor Models Suppose a factor model is appropriate to describethe returns on a stock. The current expected return on the stock is10.5 percent. Information about those factors is presented in thefollowing:

Factor

B

Expected Value

Actual Value

Growth in GNP

1.67

2.1%

2.6%

Inflation

-1.09

4.3

4.8

a. What is the systematic risk of the stock return?

b. The firm announced that its market share had unexpectedlyincreased from 11 percent to 15 percent. Investors know from pastexperience that the stock return will increase by .58 percent forevery 1 percent increase in its market share. What is theunsystematic risk of the stock?

c. What is the total return on this stock?

**can you please show excel formulas/details onwork

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Factor Models Suppose a factor model is appropriate to describethe returns on a stock. The current expected return on the stock is10.5 percent. Information about those factors is presented in thefollowing:FactorBExpected ValueActual ValueGrowth in GNP1.672.1%2.6%Inflation-1.094.34.8a. What is the systematic risk of the stock return?b. The firm announced that its market share had unexpectedlyincreased from 11 percent to 15 percent. Investors know from pastexperience that the stock return will increase by .58 percent forevery 1 percent increase in its market share. What is theunsystematic risk of the stock?c. What is the total return on this stock?**can you please show excel formulas/details onwork

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