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Here is a result of a regression of excess GE stock return on excess market (S&P500) index return, RGE-Rx= x+B(RM - Rp) + E, from

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Here is a result of a regression of excess GE stock return on excess market (S&P500) index return, RGE-Rx= x+B(RM - Rp) + E, from Excel. Using this result, answer the following questions. Multiple R R-Square Adjusted R-Square 0.35 0.12 0.02 38.45 12 Standard Error Observations Intercept Market Coefficients Standard Error 4.05 15.44 1.32 0.97 1-Stat 0.26 1.36 p-Value 0.80 0.10 1. The market risk exposure of this stock is 2. The characteristic line for this stock is RGE Rp = + x(RM -RF) 3. The stock is % riskier than the market. 4. As per CAPM, the expected market return given an expected return on a security of 11.35 % and a risk-free interest rate of 5% would be %. (Note: Round to the nearest hundredth.)

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