Consider the following linear regression model: (R; - rf) = a; + b (RMkt - r) + e; The b, in the regression: measures the deviation from the best fitting line and is zero on aver measures the sensitivity of the security to market risk. measures the diversifiable risk in returns.

Consider the following linear regressioh model: (Rirf)=ai+bi(RMktrf)+ei The bi in the regression: measures the deviation from the best fitting line and is zero on aver measures the sensitivity of the security to market risk. measures the diversifiable risk in returns