Question
An index model regression applied to past monthly returns in Fords stock price produces the following estimates, which are believed to be stable over time:
An index model regression applied to past monthly returns in Fords stock price produces the following estimates, which are believed to be stable over time:
rF = 0.1% + 1.1rM
If the market index subsequently rises by 10.4% and Fords stock price rises by 10%, what is the abnormal change in Fords stock price?
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Personal Finance Terms Financial Education Is Your Best Investment
Authors: Thomas Herold
1st Edition
1090822871, 978-1090822871
