When simple linear regression is used to develop a portfolio's ex post characteristic line, the additional term calculated is the
A) alpha.
B) slope.
C) random error term.
D) intercept.

Question

Quizplus · Accepted Answer

The additional term in a simple linear regression model is the random error term, which accounts for the variability in the dependent variable not explained by the independent variable.

When Simple Linear Regression Is Used to Develop a Portfolio's