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Here is a result of a regression of excess GE stock return on excess market (S&P500) index return, , from Excel. Using this result, answer
Here is a result of a regression of excess GE stock return on excess market (S&P500) index return, , from Excel. Using this result, answer the following questions.
1. The market risk exposure of this stock is .
2. The characteristic line for this stock is = + X
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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