The returns on share A follow the market model with coefficients CA = 0.01, BA =1.25. If at time t, K MT = 0.02 and the actual return on share A is 0.025, calculateEAt (the error term).2.%3D%3D

Alpha term (a) = 0.01 Beta term (b) = 1.25 Market return (Rm) = 0.02 Actual return of A (Re) = 0.025…

Answered: The returns on share A follow the…

The returns on share A follow the market model with coefficients aa = 0.01, ßa = 1.25. If at time t, K mt = 0.02 and the actual return on share A is 0.025, calculate ẽat (the error term). MT

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Am.11.
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Based on the information, calculate expected returns for each share, variance for each share and standard deviation for each share

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