Use the Equation for the Question(s) Below

question 19

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) constant term.
• C) error term that has an expectation of zero and is uncorrelated with either factor.
• 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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Definitions:

Mutual Mistake

The result of an error by both parties about a material fact, i.e., one that is important in the context of a particular contract.

Fraudulent Misrepresentation

The act of intentionally making false statements to induce another party to enter into a contract, resulting in harm or damage.

Intentional Misrepresentation

Deliberate false statement by one party aimed at getting another party to enter into an agreement.

Mutual Mistake

An error made by both parties in a contract that can render the agreement void.