$(4)$ Interpretation and Discussion of Regression Results

$($a$)$ What is the value of the beta estimate? Is this a "defensive" or "aggressive" stock? Does

the result accord with your a priori expectations? What portfolio combination of the S&P

$500$ index and the T$-$bills will yield the same beta?

$($b$)$ What is the value of the alpha estimate? By how much, on a monthly as well as annualised

basis, did the chosen stock outperform or underperform the stock market on average during

the sample period? By how much, on a monthly as well as annualised basis, did the chosen

stock outperform or underperform its CAPM benchmark on average during the sample

period?

$($c$)$ What is the value of the coefficient of determination $(R^2)$ of the regression? If the CAPM is

valid, does your result indicate the chosen stock has a lot or a little unique risk?