Question: You used multiple regression to express Stock ABC's expected return in terms of the S&P 500 Index and annualized GDP. The estimated returns and factor
You used multiple regression to express Stock ABC's expected return in terms of the S&P 500 Index and annualized GDP. The estimated returns and factor exposure (beta) for both variables are shown below: S&P 500 Index Annualized GDP Factor Exposure (beta) 1.12 1.43 Estimated value for next period 2.3% 1.34% If your calculated alpha is 0.02, then what is your estimate return for Stock ABC given these results from multiple regression? State your answer as a raw number, not in decimal form (ie. 13.21 not 0.1321) with two decimal places. (HINT: keep all numbers in decimal form)
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