Question 19 5 pts A financial analyst wants to understand if the stock for Johnson and Johnson (J&J) company is risky or not. In pursuit of this objective, she runs a simple linear regression model, the Capital Asset Pricing Model (CAPM) in which the risk- adjusted stock return R - Rf is used as the dependent variable and the risk- adjusted market return RM - Rf is used as the independent variable. The figure below shows the complete regression output from JMP. 4 Linear Fit R-Rf = 0.266564 + 0.5843848*RM-Rf 4 Summary of Fit RSquare 0.477186 RSquare Adj 0.468172 Root Mean Square Error 3.13735 Mean of Response 0.207833 Observations (or Sum Wgts) 60 Analysis of Variance Sum of Source DF Squares Mean Square F Ratio Model 1 521.0685 521.069 52.9382 Error 58 570.8919 9.843 Prob > F C. Total 59 1091.9604 <.0001 parameter estimates term estimate std error t ratio prob> |t| Intercept 0.266564 0.405111 0.66 0.5131 RM-Rf 0.5843848 0.080318 7.28 <.0001 at the significance level are there abnormal returns p-value for rm rf is less than so we reject h0 and conclude that exist. fail to hg do not intercept greater question p a financial analyst wants understand if stock johnson company risky. in pursuit of this objective she runs simple linear regression model capital asset pricing which risk- adjusted return r used as dependent variable market independent variable. figure below shows complete output from jmp. fit r-rf="0.266564" summary rsquare adj root mean square error response observations sum wgts analysis variance source df squares f ratio prob> F C. Total 59 1091.9604 <.0001 parameter estimates term estimate std error t ratio prob>|t| Intercept 0.266564 0.405111 0.66 0.5131 RM-Rf 0.5843848 0.080318 7.28 <.0001 the t-critical value is and test statistic computed to be less than critical so we fail reject ho conclude that j stock not risky. h0 greater hg risky>