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Consider the two (excess return) index model regression results for A and B: ...

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Finance

Consider the two (excess return) index model regression results for A and B:
RA = 1.9% + 1.9RM
R-square = 0.634
Residual standard deviation = 12.4%
RB = 1.3% + 1.1RM
R-square = 0.588
Residual standard deviation = 11.2%

a. Which stock has more firm-specific risk?
Stock A
Stock B

b. Which stock has greater market risk?
Stock A
Stock B

c. For which stock does market movement has a greater fraction of return variability?
Stock A
Stock B

d.

If rf were constant at 5.8% and the regression had been run using total rather than excess returns, what would have been the regression intercept for stock A? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal place. Omit the "%" sign in your response.)

Intercept %

rev: 04_17_2014_QC_47932, 10_29_2014_QC_54922

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