Which of the following regression outcomes indicates the asset with the greatest total risk? • large beta, small R² • small beta, large R² • small beta, small R² large beta, large R²
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- Consider the following linear regression model: (R₁-r)= a; + b(RMkt - rf) + e; The b; in the regression: O measures the deviation from the best fitting line and is zero on aver- measures the sensitivity of the security to market risk. measures the diversifiable risk in returns.9) The measure of risk in a Markowitz efficient frontier is A) specific risk. B) standard deviation of returns. C) reinvestment risk. D) beta. Provide explanation for the accurate answer.The efficient frontier measures risk by using: Group of answer choices B. Correlation A. Risk-free rates D. Standard deviation C. Beta
- Define the following terms: Factor risk premium Unit root Random walk with drift Standardized beta ARCHI can use the regression beta as my estimate of beta in a valuation. True or falseConsider the generalised linear regression model: y = Xẞ + e, with E[e] = 0 and E[ee] = 022. Let the model be estimated using both OLS and GLS, and let the OLS estimator of ẞ be denoted as BOLS and its GLS estimator as BGLS. Which of the following statements are incorrect about the OLS and GLS estimators? (a) BOLS is BLUE (b) BGLS is BLUE (c) The variance of BOLS cannot be less than that of BGLS (d) BGLS is more efficient that BOLS
- True or false? Beta of MSFT is 0.7 and beta of RCL is 1.33. One can conclude that unsystematic risk of RCL is higher than unsystematic risk of MSFT.how can I calculate in regression analysis the confidence interval of y-intercept?The regression analysis is normally depicted as "y = Ax+ B." What does "A" indicate in the equation? A) It is the expected change in the independent variable for a one-unit change in the dependent variable OB) It is the significance level for the test OC) It is the expected change in the dependent variable for a one-unit change in the independent variable OD) The confidence interval
- The concept of beta is most closely associated with:a. Correlation coefficients.b. Mean-variance analysis.c. Nonsystematic risk.d. Systematic risk.If two returns are positively related to each other, they will have a ________, and if they are negatively related to each other, the ______________. Group of answer choices positive covariance, covariance will be negative positive covariance, standard deviation will be negative negative covariance, covariance will be zero negative covariance, covariance will be positive This type of risk affects a large number of assets, each to a greater or lesser degree. Group of answer choices systematic risk unsystematic risk idiosynchratic risk principle of diversification True/False. The Dividend Discount Model can be applied to firms that do not pay dividends. Group of answer choices True FalseIn a regression analysis, the variable that is being predicted is the a. Intervening variable O b. Dependent variable С. None O d. Independent variable
