You want to analyze the return on Meta Platforms, Inc. stock (FB) by estimating a single-index model with the S&P 500 Index as a proxy for the market portfolio. Using a set of monthly return observations, you estimate the following single-index model: ri - rf = 0.002 + 1.1(rm - rf) + ei.

A) What is the beta of FB?

You do not need to explain your answer to this subquestion.

B) Suppose that the excess return for the S&P 500 Index for a month is 0.7%. According to the estimated model, what is the predicted excess return of FB?

C) Suppose that the realized excess return on FB turns out to be 1.3% in that month. What is the residual component of the excess return on FB?

D) The estimated residual variance of the excess return on FB is 0.0010. Further, the estimated variance of the S&P 500 Index monthly excess return is 0.0006. What is the model fit?