The Excess Return Form of the Single-Index Market Model Is $\alpha$

question 11

Multiple Choice

The excess return form of the single-index market model is

• A) R_it = \(\alpha\) + b(R_mt - R_it) + e_it.
• B) RFR_t = \(\alpha\) + b(R_mt -RFR_t) + e_it.
• C) R_it -RFR_t = \(\alpha\) + b(R_mt) + e_it.
• D) R_it = \(\alpha\) + b(R_mt - RFR_t) + e_it.
• E) R_it - RFR_t = \(\alpha\) + b(R_mt - RFR_t) + e_it.

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Definitions:

Consumers

Individuals or entities that purchase goods or services for personal use.

Tariff

A governmental policy tool used to control the flow of international trade through taxes on imports and exports.

Saddles Imported

The act of bringing in saddles from foreign countries for sale within the domestic market.

Quantity

The amount or number of a material or immaterial good or service.