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(1 point) The Capital Asset Price Model (CAPM) is a financial model that attempts to predict the rate of return on a financial instrument such

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(1 point) The Capital Asset Price Model (CAPM) is a financial model that attempts to predict the rate of return on a financial instrument such as a common stock in such a way that it is linearly related to the rate of return on the overal market. Specifically, R = A + B Rarkets + You are to study the relationship between the two variables and estimate the above model Rock rate of return on Stock A for month, 1 = 1,2,... 59. Rarket-market rate of return for month /,1 = 1,2,59, Bi represents the stocks beta' value, or its systematic risk. It measure's the stocks Volatility related to the market volatty. Po represents the risk-free interest rate The data in the Download csv file contains the data on the rate of return of a large energy company which will be referred to as Acne Oil and Gas and the corresponding rate of return on the Toronto Composite Index (TSE) for 59 randomly selected months Therefore Remes represents the monthly rate of return for a common share of Acme Oil and Gas stock: Ryse, represents the monthly rate of retum (increase or decream of the TSE Index for the same month, month. The first column in this data file contains the monthly rate of return on Acme Oil and gas stock: the second column contar the monthly rate of return on the TSE index for the same month. (a) Using R-Studio, create a scatter-plot of the data. What can you conclude from this scatter plot? OA. There is a negativo linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index B. There is not a linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index C. There is a positive linear relationship between the monthly rate of return of Acme Oil and Gas stock and the monthly rate of return of the TSE Index (b) Find the value of the correlation coefficient. Enter your answer using four decimals. (c) Use R-Studio to find the least squares estimate of the linest model that expressed the monthly rate of return on Acme Ol and Gas stock an alvear han tino of the monthly rate of return on the Toronto Stock Exchange Index Use three decimals in each of your answers Rams HIE Rys (d) The rate of return on the TSE Index for the month of October was -3.42%, Predict the monthly rate of return of Acme Oil and Gas stock for the month of October Use four decimals in your answer Rama (e) Interpret the meaning of the predicted value in (d) in the context of the data It the monthly rate of return of the TSE Index is 3.42 %, tho 2 of Acme Oil and Gas stocks (0) Find the coefficient of determination. Expresses as a percentago, and use two decimal places in your answer. to) in the context of the data, interpret the meaning of the coefficient of determination A. There is a strong, positive Inear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index B. The percentage found above is the percentage of variation in the monthly rate of retum of Acme stock that can be explained by its Inear relationship with the monthly rate of return of the TSE Index OO. There is a weak, positive linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index D. The percentage found above is the percentage of variation in the monthly rate of return of the TSE Index that can be explained by its linear dependency with the monthly rate of return of Acme stock stum of Acme Oil and Gas stock for the month of October Use (d) The rate of return on the TSE Index for the month a ? Your decimals in your answer. monthly rate of return normal monthly rate of return () interpret the meaning of the predicted value in (o) mean monthly rate of return RO if the monthly rate of return of the TSE Index is -3.42 %.thel? of Acme Oil and Gas stocks (Find the coefficient of determination, Expresses as a perceritage and use two decimal places in your answer. % (9) in the context of the data, interpret the meaning of the coefficient of determination A. There is a strong, positive inear relationship between the monthly pate of return of Acme stock and the monthly rate of return of the TSE Index, B. The percentage found above is the percentage of variation in the monthly rate of return of Aomo stock that can be explained by its linear relationship with the monthly rate of return of the TSE Index C. There is a weak, positive linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index D. The percentage found above is the percentage of variation in the monthly rate of return of the TSE Index that can be explained by its linear dependency with the monthly rate of return of Acme stock (h) Find the residual corresponding to the data point found in the 10th row of the data file. Use four decimals in your answer Co AcmeRoReturn TSERofReturn 1 0.885 -2.3314 2 3.5088 4.1661 3 -1.6949 2.7904 4 4.3103 5.4967 5 12.6722 6.9449 6 -5.379 -1.5124 7 10.8527 2.9879 8 -7.6923 0.7837 9 1.7677 -5.2583 10 13.1514 2.1151 11 5.2632 6.3535 12 -6.6667 0.864 13 10.9375 6.3966 14 -3.4205 -4.0215 15 5.625 6.0856 16 14.3984 -2.8918 17 -12.4138 -5.0605 18 2.3622 2.7862 19 -0.3846 0.0113 20 1.9305 5.5311 21 -4.1667 6.1654 22 -4.7431 1.3893 23 3.112 -0.9909 24 -5.0302 -3.0256 25 -8.2627 -6.2824 26 -30.7159 -25.3262 27 27.6667 1.4857 28 3.1332 9.5704 29-10.1266 2.1373 30 -8.4507 2.1904 31 10.7692 3.6201 32 - 10 -6.5037 33 8.9506 43212 34 124646 5.9434 35 -9.3199 -2.5271 36 11.6667 2.400- 37 10.4478 1.0021 38 1.1261 -1.5612 39 -0.8909 -0.1881 40 -5.3933 4.1137 41 -2.1378 3.5491 42 -0.7282 16.5841 43 5.6235 0.7992 44 -5.5556 7.097 45 3.6765 3.5234 46 17.969 -1.2279 47 14.5293 -1.0335 48 -3.3217 9.2537 49 3.4358 2.0263 50 9.2657 7.4823 51 7.2 -6.3831 52 -4.4776 -7.6596 53 8.75 -9.2932 54 9.6264 1.2734 55 -8.3879 4.1643 56 3.16 -15.388 7 -1.7194 -6.1872 58 20.0621 0.5052 59 -0.9401 6.3126 (1 point) The Capital Asset Price Model (CAPM) is a financial model that attempts to predict the rate of return on a financial instrument such as a common stock in such a way that it is linearly related to the rate of return on the overal market. Specifically, R = A + B Rarkets + You are to study the relationship between the two variables and estimate the above model Rock rate of return on Stock A for month, 1 = 1,2,... 59. Rarket-market rate of return for month /,1 = 1,2,59, Bi represents the stocks beta' value, or its systematic risk. It measure's the stocks Volatility related to the market volatty. Po represents the risk-free interest rate The data in the Download csv file contains the data on the rate of return of a large energy company which will be referred to as Acne Oil and Gas and the corresponding rate of return on the Toronto Composite Index (TSE) for 59 randomly selected months Therefore Remes represents the monthly rate of return for a common share of Acme Oil and Gas stock: Ryse, represents the monthly rate of retum (increase or decream of the TSE Index for the same month, month. The first column in this data file contains the monthly rate of return on Acme Oil and gas stock: the second column contar the monthly rate of return on the TSE index for the same month. (a) Using R-Studio, create a scatter-plot of the data. What can you conclude from this scatter plot? OA. There is a negativo linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index B. There is not a linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index C. There is a positive linear relationship between the monthly rate of return of Acme Oil and Gas stock and the monthly rate of return of the TSE Index (b) Find the value of the correlation coefficient. Enter your answer using four decimals. (c) Use R-Studio to find the least squares estimate of the linest model that expressed the monthly rate of return on Acme Ol and Gas stock an alvear han tino of the monthly rate of return on the Toronto Stock Exchange Index Use three decimals in each of your answers Rams HIE Rys (d) The rate of return on the TSE Index for the month of October was -3.42%, Predict the monthly rate of return of Acme Oil and Gas stock for the month of October Use four decimals in your answer Rama (e) Interpret the meaning of the predicted value in (d) in the context of the data It the monthly rate of return of the TSE Index is 3.42 %, tho 2 of Acme Oil and Gas stocks (0) Find the coefficient of determination. Expresses as a percentago, and use two decimal places in your answer. to) in the context of the data, interpret the meaning of the coefficient of determination A. There is a strong, positive Inear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index B. The percentage found above is the percentage of variation in the monthly rate of retum of Acme stock that can be explained by its Inear relationship with the monthly rate of return of the TSE Index OO. There is a weak, positive linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index D. The percentage found above is the percentage of variation in the monthly rate of return of the TSE Index that can be explained by its linear dependency with the monthly rate of return of Acme stock stum of Acme Oil and Gas stock for the month of October Use (d) The rate of return on the TSE Index for the month a ? Your decimals in your answer. monthly rate of return normal monthly rate of return () interpret the meaning of the predicted value in (o) mean monthly rate of return RO if the monthly rate of return of the TSE Index is -3.42 %.thel? of Acme Oil and Gas stocks (Find the coefficient of determination, Expresses as a perceritage and use two decimal places in your answer. % (9) in the context of the data, interpret the meaning of the coefficient of determination A. There is a strong, positive inear relationship between the monthly pate of return of Acme stock and the monthly rate of return of the TSE Index, B. The percentage found above is the percentage of variation in the monthly rate of return of Aomo stock that can be explained by its linear relationship with the monthly rate of return of the TSE Index C. There is a weak, positive linear relationship between the monthly rate of return of Acme stock and the monthly rate of return of the TSE Index D. The percentage found above is the percentage of variation in the monthly rate of return of the TSE Index that can be explained by its linear dependency with the monthly rate of return of Acme stock (h) Find the residual corresponding to the data point found in the 10th row of the data file. Use four decimals in your answer Co AcmeRoReturn TSERofReturn 1 0.885 -2.3314 2 3.5088 4.1661 3 -1.6949 2.7904 4 4.3103 5.4967 5 12.6722 6.9449 6 -5.379 -1.5124 7 10.8527 2.9879 8 -7.6923 0.7837 9 1.7677 -5.2583 10 13.1514 2.1151 11 5.2632 6.3535 12 -6.6667 0.864 13 10.9375 6.3966 14 -3.4205 -4.0215 15 5.625 6.0856 16 14.3984 -2.8918 17 -12.4138 -5.0605 18 2.3622 2.7862 19 -0.3846 0.0113 20 1.9305 5.5311 21 -4.1667 6.1654 22 -4.7431 1.3893 23 3.112 -0.9909 24 -5.0302 -3.0256 25 -8.2627 -6.2824 26 -30.7159 -25.3262 27 27.6667 1.4857 28 3.1332 9.5704 29-10.1266 2.1373 30 -8.4507 2.1904 31 10.7692 3.6201 32 - 10 -6.5037 33 8.9506 43212 34 124646 5.9434 35 -9.3199 -2.5271 36 11.6667 2.400- 37 10.4478 1.0021 38 1.1261 -1.5612 39 -0.8909 -0.1881 40 -5.3933 4.1137 41 -2.1378 3.5491 42 -0.7282 16.5841 43 5.6235 0.7992 44 -5.5556 7.097 45 3.6765 3.5234 46 17.969 -1.2279 47 14.5293 -1.0335 48 -3.3217 9.2537 49 3.4358 2.0263 50 9.2657 7.4823 51 7.2 -6.3831 52 -4.4776 -7.6596 53 8.75 -9.2932 54 9.6264 1.2734 55 -8.3879 4.1643 56 3.16 -15.388 7 -1.7194 -6.1872 58 20.0621 0.5052 59 -0.9401 6.3126

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