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Question 6 A stock has its past returns graphed against market returns. The line that has the best fit for the return data has the
Question 6
A stock has its past returns graphed against market returns. The line that has the best fit for the return data has the formula y = 0.335x + 0.501. What information can we derive from this?
The systematic risk of this stock is greater than that of the average stock. | ||
The stock must have earned lower returns than the market during that period. | ||
The beta of the stock is 0.501. | ||
The beta of the stock is 0.335. | ||
The alpha of this stock is 0.335. |
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