Use the Equation for the Question(s)below

question 49

Multiple Choice

Use the equation for the question(s) below.
Consider the following regression model:
R_s - r_f = a_s + (R_F1 - r_f) + (R_F2 - r_f) + e
-The term a_s is a(n) :

• A)error term that has an expectation of zero and is uncorrelated with either factor.
• B)measure of the expected percent change in the excess return of a security for a 1% change in the excess return of the first factor portfolio.
• C)measure of the expected percent change in the excess return of a security for a 1% change in the excess return of the second factor portfolio.
• D)constant term.

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Definitions:

Spatial Analysis

The technique of analyzing phenomena and patterns that occur within a given geographic space, often used in geography and environmental studies.

Analytic Marxism

An approach to Marxist theory that combines the insights of classical Marxism with tools and methods from analytical philosophy and the social sciences.

Empirical Methods

refer to the collection of data through observation and experimentation to understand the world.

Neo-Marxism

An approach that applies Marxist theories and methods to contemporary issues, emphasizing culture, ideology, and the role of the state.