Excess Returns (1) SCL Intercept Excess returns on market index e R; = = Q ; + BiRm + e As we add stocks to the portfolio, which term tends to get smaller (based on the graph above)? o Excess returns Intercept o Slope of the line o Ri a ei d Bi O Rm Excess Returns (1) SCL Intercept Excess returns on market index e R; = = Q ; + BiRm + e As we add stocks to the portfolio, which term tends to get smaller (based on the graph above)? o Excess returns Intercept o Slope of the line o Ri a ei d Bi O Rm