An index model regression applied to past monthly returns in Ford’s stock price produces the following estimates, which are believed to be stable over time:    rF = 0.1% + 1.1rM   If the market index subsequently rises by 8.4% and Ford’s stock price rises by 8%, what is the abnormal change in Ford’s stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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An index model regression applied to past monthly returns in Ford’s stock price produces the following estimates, which are believed to be stable over time:

 

 rF = 0.1% + 1.1rM

 

If the market index subsequently rises by 8.4% and Ford’s stock price rises by 8%, what is the abnormal change in Ford’s stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

 

 

 

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