A single index model regression for a stock is summarized as:

R_i = 0.2 + 1.5 R_M

R-squared = .40

The results imply that the correlation coefficient between R_i and R_M is _____ .

		0.2
		.6324
		.16
		1.5

A stock has a beta = 2. The expected return on the market is 10%, and the risk-free rate of return is 3%

What is the expected rate of return of the stock according to the capital asset pricing model?

		17%
		23%
		26%
		14%

In a regression model the range of values that the R-squared could possibly be is as low as -1 and as high as +1.

True

False