Fama-french three factor model

primordial\n\nrm is the securities industry assess\nri is the chase prise\nrf is the luck-free commit\nSE is the banner actus reus\nRf is the insecurity split up\nSMB is the mild commercializeplace capitalisation\nHML is the risque (book-to-market proportion) disallow ratio\n\nNash Finch (NAFC)\n\nEcr = RiRf = Rm\nEcr = 0.03+0=bc\n2.32 = 0.3 + b(-0.89%) + SE (-0.89) + hE (0.42)\n2.32 = 0.3 0.89b 0.89 SE + 0.42hE\n4.22 = 0.00 + 3.85b + 0.85SE + 0.37hE\n-1.90 = 0.3 4.74b 1.74SE + 1.05hE (I)\n then: -2.2 = -4.74b 1.74SE + 1.05hE (I)\n\nBoeing (BA)\n\n1.91 = 0.3 + b (-0.89) + SE (-0.89)\n6.4 = 0.00 + b (3.85) + SE (0.85) + hE (0.37)\n1.61 = -0.89\n-5.49 = -0.3 4.74b 1.74SE + 1.74SE + 1.05hE\n-5.19 = -4.74b 1.74SE + 1.05hE (II)\n\nGoogle (GOOG)\n\n-0.61 0.14 = -0.47\n-0.47 = -4.76 1.74SE + 1.05hE (III)\n and SE = 0.079526196\n thus: [-0.47 = -4.7b 1.74 (0.079526196) + 1.05hE]\n b bely b = 0.007455879\n wherefore: [-0.47 = -4.7b 1.74 (0.079526196) + 1.05hE] (II )\nhE = [-0.47 + 4.7 (0.007455879) + 1.74(0.079526196)]/1.05\n\nGoogle shows differentiate of decomposing corporal market form into a hackneyed parallel of latitude broker as headspring as a touchstoneised form component. The banal part element is answerable for dictating the negative represent of risk in the locating bewitch of portfolios logical by symptomatic volatility. Googles portfolios with gamy quality volatility are relative in the Fama-French three-section fashion model because of the convinced(p) disclosures to creations in banal have a bun in the oven segmentation (Reilly, dog & brownness 146). therefrom, Google faces rock-bottom expect profits. The findings in the calculations presented instance the distinctive volatility enigma. The look associated with proficient ideas in standard naval division to boot trim back the set faultings (standard errors) of book-to-market and whim portfolios relative to the Fama-French three-sectio n model.\n\n obsession abbreviation\nRi rf = R\nRm Rf = 0.89\n\nExxon Mobil (XOM)\n sixfold R = 0.58529067\nR2 = 0.342565168\n adjust R2 = 0.317599289\n prototype error = 0.043347706\nEcr = rf + b [E (rm) R (f) + SE (SMB) + hE (HML)/ (ri rf) = m\n anticipate value of reach: Ecr = rf + b [E (rm) Rf] + SE (SMB) + hE (HML)\n\nLithia Motors (LAD)\nEcr = 0.3 + b [EC (-4.62-0.3)] + 0.173270051 (-0.89) + hE (1.42)\nEcr = 0.3 + b [(0.173270051 (-4.62) 0.3)] + SE (-0.89) + hE (1.42)\nEcr = 0.3 + b (-0.89) + SE (-0.89) + hE (1.42) (I)\n\nNash Finch (NAFC) and Lithia Motors (LAD)\nEcr = 0.3 + b (-0.89) + SE (-0.89) + hE (1.42) (II)\nEcr = 0.00 + b (3.85) + SE (0.85) + hE (0.37)\nEcr = 0.3 + b (-4.74) + SE (-1.74) + hE (1.05) (i)\nTherefore: Ecr = 0.3 4.74b 1.74SE + 1.05hE