1. Compute the annualized Jensen's alpha. What does this value tell you about management's ability at Textron?
2. What are the 3 decisions the analyst must make in setting up the regression described above?

1. 

Regression Statistics \begin{tabular}{lr} \hline Multiple R & 0.7896703 \\ R Square & 0.6235791 \\ Adj R Square & 0.6170891 \\ Standard Error & 0.0613324 \\ Observations & 60 \\ \hline \end{tabular} ANOVA \begin{tabular}{|c|c|c|c|c|c|c|} \hline & df & SS & MS & F & \begin{tabular}{c} Significance \\ F \\ \end{tabular} & \\ \hline Regression & 1 & 0.361431 & 0.361431 & 96.08285 & 6.47407E14 & \\ \hline Residual & 58 & 0.218176 & 0.003762 & & & \\ \hline \multirow[t]{3}{*}{ Total } & 59 & 0.579607 & & & & \\ \hline & & Standard & & & & \\ \hline & Coefficients & Error & t Stat & P-value & Lower 95\% & Upper 95\% \\ \hline Intercept & -0.0071 & 0.008147 & -0.870397 & 0.388 & -0.0234 & 0.0092 \\ \hline SP500 & 1.7078 & 0.174231 & 9.802186 & 0.000 & 1.3591 & 20566 \\ \hline \end{tabular}