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Consider the Regression Equation: Ri - Rf = G0

Question 17

Multiple Choice

Consider the regression equation: ri - rf = g0 + g1bi + eit
where:
Ri - rf = the average difference between the monthly return on stock i and the monthly risk-free rate
Bi = the beta of stock i
This regression equation is used to estimate


A) the benchmark error.
B) the security market line.
C) the capital market line.
D) the benchmark error and the security market line.

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