Question: struggling on question Consider the two (excess return) index-model regression results for stocks A and B. The risk-free rate over the period was 7%, and
Consider the two (excess return) index-model regression results for stocks A and B. The risk-free rate over the period was 7%, and the market's average return was 16%. Performance is measured using an index model regression on excess returns. a. Calculate the following statistics for each stock (use whole percent values, 1%, not 0.01 for example, for your calculations): (Round your answers to 4 decimal places.) b. Which stock is the best choice under the following circumstances
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