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  3. suppose that the index model for stock a is estima

Suppose that the index model for stock A is estimated from excess returns with the...

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Finance

  • Suppose that the index model for stock A is estimated from excess returns with the following results:

RA=3%+0.5 RM+eA , RSQ-A=0.4

image

  • What is the unsystematic component of the variance for stock A?

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