Assume the following regression line which resulted from plotting a shares risk premium against the market...
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Assume the following regression line which resulted from plotting a shares risk premium against the market portfolios risk premium (in other words, the "Characteristic line" for a hypothetical shares risk premium): -1.5%+0.90 (Rm - Rf) Explain briefly what is the meaning of the alpha coefficient (-1.5) and the Beta coefficient (0.90) in this characteristic line. Assume the following regression line which resulted from plotting a shares risk premium against the market portfolios risk premium (in other words, the "Characteristic line" for a hypothetical shares risk premium): -1.5%+0.90 (Rm - Rf) Explain briefly what is the meaning of the alpha coefficient (-1.5) and the Beta coefficient (0.90) in this characteristic line.
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In this characteristic line the alpha coefficient 15 is a measure of the excess retur... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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