The following plot shows the estimated single-index model (blue line) from a sample of data points...
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The following plot shows the estimated single-index model (blue line) from a sample of data points (black dots) of the excess returns on a stock and the market portfolio: -15% -10% Stock Excess Return 15% 70 10% 5% 0% -5% -10% -15% 5% 15% Market Excess Return 10% Which of the following is a correct inference from this plot? The slope of the blue line is the market risk premium The X-intercept of the blue line is the alpha of the stock The stock is moving against the market O The correlation between the stock and the market excess returns is greater than 0 but less than 1 The following plot shows the estimated single-index model (blue line) from a sample of data points (black dots) of the excess returns on a stock and the market portfolio: -15% -10% Stock Excess Return 15% 70 10% 5% 0% -5% -10% -15% 5% 15% Market Excess Return 10% Which of the following is a correct inference from this plot? The slope of the blue line is the market risk premium The X-intercept of the blue line is the alpha of the stock The stock is moving against the market O The correlation between the stock and the market excess returns is greater than 0 but less than 1
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Related Book For
Fundamentals of Financial Management
ISBN: 978-1305635937
Concise 9th Edition
Authors: Eugene F. Brigham
Posted Date:
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