Question
The tables below contain the regression results with monthly returns on a large-cap mutual fund (the dependent variable) and monthly returns on a market index
The tables below contain the regression results with monthly returns on a large-cap mutual fund (the dependent variable) and monthly returns on a market index (the independent variable). The analysis is performed using 12 monthly observations. (4 points)
Regression Statistics:
Multiple R | 0.776 |
R-squared | 0.602 |
Standard Error | 4.243 |
Observations | 12 |
Regression Equation:
| Coefficients | Standard Error | t-Statistic | P-value |
Intercept | -0.287 | 1.314 | -0.219 | 0.831 |
Slope coefficient | 0.802 | 0.206 | 3.890 | 0.003 |
Question: What is the predicted return on the large-cap mutual fund for a market index return of 8%? Show your calculation.
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