What percent of variation in returns is explained by the


Beta=-0.00035

y=-0.0004x+1.119

A) What percent of variation in returns is explained by the market index?

B) What is the y-intercept of your company? What does it mean? Is it significanlty greater than zero? Does CAPM appear to explain the returns of your company very well?

C) What is the difference in how you would estimate beta using the market model versus using the CAPM? Would you expect much of a difference in your results?

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Financial Management: What percent of variation in returns is explained by the
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