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1. What is the formula for the small cap index' characteristic line?

2. What is the small cap index' beta?

3. What percentage of the variation in the small cap index' returns is explained by the variation in the Market?

4. Does this regression have much explanatory power? Why or why not? (HINT: You need to cite 2 statistics to answer this question fully.)

Small Cap on Total Market SUMMARY OUTPUT Rearession Statistics Multiple FR R Square Adjusted R Square Standard Error Observations 0.92 0.85 0.84 1.10 51.00 ANOVA df 1.00 49.00 50.00 MS Sianificance F 325.24325.24 1.20 0.00 Regression Residual Total 270.89 58.83 384.07 Coefficient: Standard Error t Stat P-value (0.23) 16.46 0.15 0.06 Intercept Market (0.035) 0.985 0.82 0.00