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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 8.1% and Fords stock price rises by 7%, what is the abnormal change in Fords stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Abnormal return | % |
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