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Unformatted text preview: that are greater than 0.05. There is insufficient evidence from the residuals to conclude that the normal distribution is unreasonable. If we rescale the CAPM model estimation suppose that the data on the rate of return for the company stock, the return on the market portfolio, and the risk- free rate of return are multiplied by 100 to express the data as percentage returns. As a result, the intercept and slope are 100/1 of the original ones. The value of the slope estimate, intercept estimate, residuals are changed by the multiply of 100; however, the estimate of the error variance and the t-statistics and p-value are unchanged. Econ 326 Instructor: D. Whistler Assignment 3 Name: Anthony Cheng Student no: 81474066 Date: Feb 4, 2009...
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