Question: Problem 11-18 An index model regression applied to past monthly returns in Fords stock price produces the following estimates, which are believed to be stable

Problem 11-18

An index model regression applied to past monthly returns in Fords stock price produces the following estimates, which are believed to be stable over time:

r_F = 0.1% + 1.1r_M

If the market index subsequently rises by 7.1% and Fords stock price rises by 7%, what is the abnormal change in Fords stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Abnormal return

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