Analysts may use regression analysis to estimate the index model for a stock.When doing so, the intercept of the regression line is an estimate of
A)the $\alpha$ of the asset.
B)the $\beta$ of the asset.
C)the $\sigma$ of the asset.
D)the $\delta$ of the asset.

Question

Quizplus · Accepted Answer

The intercept of the regression line represents the estimated alpha (α) of the asset, which is the excess return on the asset when the market return is zero.

Analysts May Use Regression Analysis to Estimate the Index Model α\alphaα

Analysts May Use Regression Analysis to Estimate the Index Model $\alpha$