Refer to the top-right panel of Figure 9.2. What proportion of U.S. Steels returns was explained by market movements? What proportion of risk was diversifi- able? How does the diversifiable risk show up in the plot? What is the range of possible errors in the estimated beta?

VABLE 9.2 Technologies A and B have the same expected cash flows, but, since B's costs are fixed, its cash flows are hit harder by economic downturns and have a higher beta. VABLE 9.2 Technologies A and B have the same expected cash flows, but, since B's costs are fixed, its cash flows are hit harder by economic downturns and have a higher beta