In Finance, an important measure of the risk of a particular stock is its beta coefficient. This coefficient can be estimated by running a regression of the stock’s return as the dependent variable and the return of a broad-based stock index (e.g., the S&P 500 index) as the independent variable. The “b1” coefficient (the slope coefficient on the independent variable) in the model is an estimate of the stock’s beta.

1. Run a simple linear regression with Nordstrom Return as the dependent variable and S&P 500 Return as the independent variable (10 points)

2. How much of the variation in Nordstrom’s stock return is explained by the regression model (i.e., the S&P 500’s return? (10 points)

Answer rating: 100% (QA)

ANSWERS 1 liner regressin is liner rh fr mdeling the reltinshi between slr resnse nd ne r mre exlntry vribles ls knwn s deendent nd indeendent vribles ... View the full answer