Assume you gathered the historical weekly excess returns for IBM and for a S&P 500 portfolio using data over the last 2 years and plotted them as shown in the scatter plot below. Assume the trend line shown on the plot is from a CAPM motivated regression of the IBM excess returns on the market excess returns. Question: Which of the statements below best describes how the beta and alpha regression coefficients would be related to the figure? Excess returns on IBM 0.10 0.00 -0.10 -0.20 O -0.2 0 CAPM regression for IBM 0 9 O -0.1 0.0 Excess returns on MARKET 80 8 0.1 O The beta is the slope of the regression trend line. The alpha is the intercept of the line. O The alpha is the slope of the regression trend line. The beta is the intercept of the line. O The beta is proportion of variation in the Y-axis variable explained by the model. O Beta is the measure of total risk.

Assume you gathered the historical weekly excess returns for IBM and for a S&P 500 portfolio using data over the last 2 years and plotted them as shown in the scatter plot below. Assume the trend line shown on the plot is from a CAPM motivated regression of the IBM excess returns on the market excess returns. Question: Which of the statements below best describes how the beta and alpha regression coefficients would be related to the figure? Excess returns on IBM 0.10 0.00 -0.10 -0.20 O -0.2 0 CAPM regression for IBM 0 9 O -0.1 0.0 Excess returns on MARKET 80 8 0.1 O The beta is the slope of the regression trend line. The alpha is the intercept of the line. O The alpha is the slope of the regression trend line. The beta is the intercept of the line. O The beta is proportion of variation in the Y-axis variable explained by the model. O Beta is the measure of total risk.