In a Simple Linear Regression Problem, the Following Statistics Are

question 119

Multiple Choice

In a simple linear regression problem, the following statistics are calculated from a sample of 10 observations: . The least squares estimates of the slope and y-intercept are respectively:

• A) 1.5 and 0.5
• B) 2.5 and 1.5
• C) 1.5 and 2.5
• D) 2.5 and -5.0
• E) none of these

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Definitions:

Total Value

The summation of all assets or investments owned by an individual or entity, reflecting overall worth.

Risk-Free Portfolio

An investment portfolio consisting of assets that have no risk of financial loss, typically associated with government bonds.

Portfolio Beta

A measure of the volatility, or systematic risk, of a portfolio in comparison to the market as a whole, indicating how sensitive the portfolio is to market movements.

Security Market Line

A line that represents the relationship between the risk of an investment and its expected return, used in capital asset pricing model (CAPM) to determine risk-adjusted returns.