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After you run the following time-series regression: Rt+1=+RMt+lont+1 , where Rt is the...

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Accounting

After you run the following time-series regression:
Rt+1=+RMt+lont+1
, where Rt is the return of stock A in month t+1,RMt is the stock market
return in month t. You find that
hat()=0.05
and
hat()=0.3
. Suppose the current month stock market return is 10%. What is the predicted
return of stock A next month, according to your model?
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