Consider the regression R = a + 8Akt + c where R is the monthly return on a share of Microsoft and Mkt is the monthly return on the S&P 500 minus the risk free rate 1. Assume that the covariance of R and MKt is positive. What is the expected sign of 8 and why? 2. What is the interpretation of # (warning for those who know what the CAPM is: this regres- sion is not the CAPM)? 3. Suppose you ran the regression using observations on R and Akt and obtained the following estimates R = 2.1 + 0.8 Mkt (0.9) (0.2) with a sample size of 240 (20 years of monthly return observations) and where the numbers in parentheses are the standard errors (the standard error is -). Use this information to test the null hypothesis that A = 0 versus the alternative hypothesis that # * 0 at the 5% level 4. Now test the null hypothesis that A = 1 versus the alternative hypothesis that A * 1 at the 5% level 5. Construct a 99% confidence interval for # 6. Suppose you instead ran the regression R - Ry = ow + got"Akt + e where Ry is some constant. Does and" = a? Does god = f