Use the Equation for the Question(s) Below

question 60

Multiple Choice

Use the equation for the question(s) below.
Consider the following regression model:

-The term is a(n)

• A) 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.
• B) error term that has an expectation of zero and is uncorrelated with either factor.
• C) constant term.
• D) 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.

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