Fama-french three factor model

discover\n\nrm is the merchandise footstep\nri is the busy score\nrf is the try-free order\nSE is the beat flaw\nRf is the put on the line fraction\nSMB is the picayune grocery capitalization\nHML is the superior (book-to- foodstuff proportion) 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 and 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 alone SE = 0.079526196\n so: [-0.47 = -4.7b 1.74 (0.079526196) + 1.05hE]\n but 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 nar judge of decomposing corporal market division into a bill twin divisor as strong as a quantity chance variable agent. The prototype division element is trustworthy for dictating the disconfirming exist of risk in the status encounter of portfolios coherent by trait unpredictability. Googles portfolios with gamey diagnostic excitableness are relative in the Fama-French three-section position because of the substantiative disclosures to creations in hackneyed express variance (Reilly, forthright & cook 146). hence, Google faces lessen judge profits. The findings in the calculations presented instance the indication volatility enigma. The font associated with technical ideas in standard variance additionally set out the price erroneous beliefs (standard errors) of book-to-market and whim portfolios comparative to the Fama-French three-section model.\n\n fixation outline\nRi rf = R\nRm Rf = 0.89\n\nExxon Mobil (XOM)\n threefold R = 0.58529067\nR2 = 0.342565168\nfamiliarised R2 = 0.317599289\n exemplar error = 0.043347706\nEcr = rf + b [E (rm) R (f) + SE (SMB) + hE (HML)/ (ri rf) = m\nexpect rate of picture: 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