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CAPM: E[Rj] = r f + B j (R m -R f ) regression equation for estimating beta: R j =a j +B j R

CAPM: E[Rj] = r_f + B_j(R_m-R_f)

regression equation for estimating beta: R_j=a_j+B_jR_m+E_j

_{what is the relation between the two above?}

_{why does the first equation not consider epsilon? and why does variance formula not consider alpha?}

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