Business, 05.03.2020 11:56 itsyourgirll

Consider the two (excess return) index model regression results for A and B:

RA = –1.1% + 1.7RM

R-square = 0.682

Residual standard deviation = 14%

RB = 0.4% + 1.4RM

R-square = 0.576

Residual standard deviation = 12.5%

a. Which stock has more firm-specific risk?

Stock A

Stock B

b. Which stock has greater market risk?

Stock A

Stock B

c. For which stock does market movement has a greater fraction of return variability?

Stock A

Stock B

d. If rf were constant at 8% and the regression had been run using total rather than excess returns, what would have been the regression intercept for stock A? (Negative value should be indicated by a minus sign.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 14:30

At which level will a manager use analytics to make decisions? operational level managerial level strategic level all of the above

Answers: 3

Answer

Business, 22.06.2019 11:20

In 2000, campbell soup company launched an ad campaign that showed prepubescent boys offering soup to prepubescent girls. the girls declined because they were concerned about their calorie intake. the boys explained that “lots of campbell’s soups are low in calories,” which made them ok for the girls to eat. the ads were pulled after parents expressed concern. why were parents worried? i

Answers: 2

Answer

Business, 22.06.2019 12:40

Acompany has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. experience suggests that 6% of outstanding receivables are uncollectible. the current credit balance (before adjustments) in the allowance for doubtful accounts is $1,200. the journal entry to record the adjustment to the allowance account includes a debit to bad debts expense for $4,800. true or false

Answers: 3

Answer

Business, 22.06.2019 15:10

Paddock pools constructed a swimming pool and deck for the jensens' home. paddock installed the wrong trim on the pool. it would cost $2800 to change the trim-one-fifth of the total cost of the pool. the jensens refuse to pay anything for the pool. the paddock's best defense is: (a) duress (b) substanial performance (c)mistake (d) failure of conditions

Answers: 3

Answer

You know the right answer?

Consider the two (excess return) index model regression results for A and B:

RA = –1.1%...

Questions