What is the security characteristic line (SCL)? Explain the SCL with respect to figure 8.3. With respect to HPQ (Hewlett Packard), what does the ANOVA table 8.1 suggest about the explanatory effects of the regression equation and also, the explanatory effects of the error term? Discuss the estimate of beta and the firm-specific risk of Hewlett Packard. What is the significance of alpha in the discussion?

CE 10 .05 10 Excess Returns, S&P 500 Figure8.3 Scatter diagram of HP the S&P 500, and the security chara cteristic line (SCL) for HP CE 10 .05 10 Excess Returns, S&P 500 Figure8.3 Scatter diagram of HP the S&P 500, and the security chara cteristic line (SCL) for HP