Question
Suppose we obtain 3 years worth of monthly returns for Facebook and chart it against the Russel 2000 index. We create a least squares line
Suppose we obtain 3 years worth of monthly returns for Facebook and chart it against the Russel 2000 index. We create a least squares line and the equation of the line is:
Y = .732X - .012
Which of the following is true?
| A. | The alpha is 1.2% and the beta is -.732 | |
| B. | The alpha is 1.2% and the beta is .732 | |
| C. | The alpha is -1.2% and the beta is .732 | |
| D. | The alpha is 7.32% and the beta is -.012 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Finance And Sustainability
Authors: Karolina Daszyńska-Żygadło, Agnieszka Bem, Bożena Ryszawska, Erika Jáki, Taťána Hajdíková
1st Edition
3030344037, 978-3030344030
