The purchase of shares in the xyz mutual fund

Reference no: EM131128845

Suppose you are considering the purchase of shares in the XYZ mutual fund. As part of your investment analysis, you regress XYZ's monthly returns for the past five years against the three factors specified in the Fama and French models. This procedure generates the following coef- ficient estimates: market factor = 1.2, SMB factor = -0.3, HML factor = 1.4. Explain what each of these coefficient values means. What types of stocks is XYZ likely to be holding?

Reference no: EM131128845

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