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Using the Single Index Model, the alpha of a stock is 0.01 and the beta is 1.1. Calculate the residual if the excess return on
Using the Single Index Model, the alpha of a stock is 0.01 and the beta is 1.1. Calculate the residual if the excess return on the market is -0.02 and the actual excess return on the stock is -0.12. Express your answer as a decimal with three digits after the decimal point (e.g. 0.123 or -0.123, not 12.3% or -12.3%).
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