Are the intercepts of the two regressions consistent with the CAPM Interpret their values Suppose that the index model for stocks A and B is estimated with the following results RA 03 70RM eA RB 2 02 1 20RM eB sM 20 RA squared 20 RB squared 12 ...

The nonzero alphas from the regressions are inconsistent with the ...

Are the intercepts of the two regressions consistent with the CAPM? Interpret their values. Suppose that the

Question:

Are the intercepts of the two regressions consistent with the CAPM? Interpret their values.
Suppose that the index model for A and B is estimated with the following results: RA = .03 + .70RM + eA
RB = 2.02 + 1.20RM + eB
sM = .20; RA- squared = .20; RB- squared = .12
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...