You run a regression of Nvidia Corporation's (NVDA) excess stock return on the S&P 500 excess return and obtain a slope coefficient (beta) of 1.38. If NVDA's annual volatility is 40% and the S&P 500 annual volatility is 17%, what fraction of NVDA's total variance is idiosyncratic, according to the CAPM?

Answer rating: 100% (QA)

To determine the fraction of NVIDIA Corporations NVDA total variance that is idiosyncratic according ... View the full answer