An analyst estimates the index model for a stock using regression analysis involving total returns, not the excess return. The estimated intercept in the regression equation is 6% and the β is 0.5. The risk-free rate of return is 12%. The true β of the stock is
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Home » Business » An analyst estimates the index model for a stock using regression analysis involving total returns, not the excess return. The estimated intercept in the regression equation is 6% and the β is 0.5. The risk-free rate of return is 12%.