The intercept calculated by Merrill Lynch in the regression equations is equal to

Related MCQs

• Merrill Lynch estimates the index model for a stock using regression analysis involving total returns. They estimated the intercept in the regression equation at 6% and the β at 0.5. The risk-free rate of return is 12%. The true β of the stock is ________.
• If a firm's beta was calculated as 0.6 in a regression equation, Merrill Lynch would state the adjusted beta at a number
• The Security Risk Evaluation book published by Merrill Lynch uses the __________ as a proxy for the market portfolio.
• Analysts may use regression analysis to estimate the index model for a stock. When doing so, the slope of the regression line is an estimate of ______________.
• Which of the following is/are true if a firm has a required rate of return equal to the ROE? I. The amount of earnings retained by the firm does not affect market price or the P/E. II. The firm can increase market price and P/E by increasing the growth rate. III. The P/E ratio is inversely proportional to the ROE of the firm.
• The market risk, beta, of a security is equal to
• The risk-free rate and the expected market rate of return are 0.06 and 0.12, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.2 is equal to
• The risk-free rate and the expected market rate of return are 0.056 and 0.125, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on a security with a beta of 1.25 is equal to
• According to the Capital Asset Pricing Model (CAPM), the expected rate of return on any security is equal to