Analysts may use regression analysis to estimate the index model for a stock.When doing so,the intercept of the regression line is an estimate of ______________.
A)the β of the asset.
B)the β of the asset .
C)the β of the asset
D)The β of the asset
E)none of the above

Question

Analysts may use regression analysis to estimate the index model for a stock.When doing so,the intercept of the regression line is an estimate of ______________.
A)the β of the asset.
B)the β of the asset .
C)the β  of the asset
D)The β of the asset
E)none of the above

Quizplus · Accepted Answer

The intercept of the regression line is an estimate of the alpha of the asset, which is the expected return of the asset when the market return is zero.

Analysts May Use Regression Analysis to Estimate the Index Model