A Linear Regression to Estimate the Relation Between General Motors

question 81

Multiple Choice

A linear regression to estimate the relation between General Motors' stock returns and the market's return gives the best-fitting line that represents the relation between the stock and the market. The slope of this line is our estimate of ________.

• A) alpha
• B) beta
• C) risk-free rate
• D) volatility

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Definitions:

Insurance Policy

A contract between an insurance company and the policyholder which outlines the terms, coverage, and conditions under which the insurer agrees to compensate the insured for losses.

Impartial

Not biased, fair; not favoring one side over another.

Insurable Interest

Insurable Interest is a principle requiring that a person purchasing insurance has a stake in the safety and protection of the insured object or individual against loss or damage.

Fraud

Fraud refers to wrongful or criminal deception intended to result in financial or personal gain.