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If you use a linear model to identify an asset return and find that the historical ( observed ) return was much higher than the
If you use a linear model to identify an asset return and find that the historical observed return was much higher than the model estimate:
Select all statements that a truecorrect Incorrectly selected statements will penalize your total score
a
You might forecast that the price would fall
b
You might conclude that the stock was underpriced
c
You should be skeptical of your linear model and perform various statistical tests to attempt to verify the finding
d
You might conclude that there is a mispricing
e
You might concluded that the stock was overpriced
f
You might forecast that the stock price would rise
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