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Say you estimate the security characteristic line for Tesla and find its beta with respect to the SP500 to be 1.2 and its alpha to
Say you estimate the security characteristic line for Tesla and find its beta with respect to the SP500 to be 1.2 and its alpha to be zero. On average, on a day when SP500 is up 2% above the risk-free rate, what will be Tesla's excess return (i.e., its return above the risk-free rate)?
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