In pert a. you asked EXCEL to return the residua's of the regression , which is the =Failon in the regression Equation . If you remember back to statistics, the residuals are the linear distance from Each Observation to the regression line . In this context, the residual= are the FErt of Each monthly return that is not Exp zinEd by the market made Estimate . The residuals Can be LEEd to calculate the = PATZKEEl ratio , which is the =|ph= dividEd by the Standard deviation of the residuals . I] What do you think the appraisal ratio is intended to measure ?" 21 Calculate the appraisal ratio for the stock and the mutual fund . Which HE= a better appraisal ratio ?" 2 1 Often , the appraisal ratio is used to Evaluate the performance of mutual fund managers . Why do you think the appraisal ratio is weed more often for mutual funds . which ErE portfolios . then for individual Stocks ?"