Question: QUESTION 2 Consider the following linear regression model: The ai in the regression O measures the deviation from the best fitting line and is zero

QUESTION 2 Consider the following linear regression model: The ai in

QUESTION 2 Consider the following linear regression model: The ai in the regression O measures the deviation from the best fitting line and is zero on average. O measures the diversifiable risk in returns. O measures the historical performance of the security relative to the expected return predicted by the SML O measures the sensitivity of the security to market risk

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