Regression : Interpretation of Intercept and Slope of Regression Line
Solve the following problem:
1) The following regression line shows how the monthly return for the mutual fund TWCUX (Twentieth Century Ultra Fund) is mathematically related to the S&P500 monthly return.
TWCUX = -2.61 + 1.27 (S&P500)
Explain what both the intercept and slope of the regression line tell you in the context of this problem. Calculate what the estimated monthly return for TWCUX would be if the monthly return for the S&P 500 were 15%.