Fama-french three factor model

Key\n\nrm is the food mart value\nri is the interest group rate\nrf is the adventure-free rate\nSE is the tired error\nRf is the risk member\nSMB is the small market capitalization\nHML is the mellowed (book-to-market dimension) minus 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 indeed: -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 nevertheless SE = 0.079526196\n hence: [-0.47 = -4.7b 1.74 (0.079526196) + 1.05hE]\nBut b = 0.007455879\nTherefore: [-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 license of decomposing collective market divergency into a modular mate fraction as well as a step variance element. The standard variance element is responsible for dictating the electronegative cost of risk in the face view of portfolios consistent by feature of speech excitability. Googles portfolios with luxuriously sign volatility are proportional in the Fama-French three-section precedent because of the positive disclosures to creations in standard striving variance (Reilly, wienerwurst & Brown 146). Therefore, Google faces diminish expected profits. The findings in the calculations presented illustrate the characteristic volatility enigma. The survey associated with technological ideas in standard variance additionally trim the pricing errors (standard errors) of book-to-market and impetus portfolios comparative to the Fama-French three-section model.\n\n backsliding analysis\nRi rf = R\nRm Rf = 0.89\n\nExxon Mobil (XOM)\nMultiple R = 0.58529067\nR2 = 0.342565168\nAdjusted R2 = 0.317599289\n standardized error = 0.043347706\nEcr = rf + b [E (rm) R (f) + SE (SMB) + hE (HML)/ (ri rf) = m\n judge rate of shine: 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