Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the regression analysis of stock Y shows that R-sq is 75%, residual standard deviation is 0.21, the beta coefficient is 0.9, and the constant

Suppose the regression analysis of stock Y shows that R-sq is 75%, residual standard deviation is 0.21, the beta coefficient is 0.9, and the constant term is 1.5%. The percentage of the stock return variation due to firm-specific surprises is 25%.

a.)If the market excess return has an unexpected change of 1.5%, the stock Y tend to respond by ______%

b.) The total risk of the stock is ________%

c.) The variance of the market is ________%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Money Banking And Financial Markets

Authors: Stephen Cecchetti, Kermit Schoenholtz

6th Edition

1260226786, 9781260226782

More Books

Students also viewed these Finance questions

Question

Do I want people to be more like me?

Answered: 1 week ago

Question

=+How is CSR different from strategic CSR?

Answered: 1 week ago