Analysts May Use Regression Analysis to Estimate the Index Model

question 27

Multiple Choice

Analysts may use regression analysis to estimate the index model for a stock. When doing so, the slope of the regression line is an estimate of

• A) the α of the asset.
• B) the β of the asset.
• C) the σ of the asset.
• D) the δ of the asset.

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Definitions:

Cohesion-tension

A hypothesis that explains the process of water movement up plants due to water molecules' cohesive and adhesive properties and the evaporation of water from the leaves.

Xylem

the vascular tissue in plants that conducts water and dissolved nutrients upward from the root and also helps to form the woody element in the stem.

Transpiration

Plant’s loss of water to the atmosphere, mainly through evaporation at leaf stomata.

Petioles

The stalks that join a leaf to the stem of a plant.