Consider the two (excess return) index model regression results for A and B:
RA = –1.1% + 1.7RM
R-square = 0.682
Residual standard deviation = 14%
RB = 0.4% + 1.4RM
R-square = 0.576
Residual standard deviation = 12.5%
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 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.

Consider the following scenarios. use what you have learned to decide if the goods and services being provided are individual, public, or merit goods. for each case, state what kind of good has been described and explain your answer using the definitions of individual, public, and merit goods. (6 points each) 1. from your window, you can see a city block that's on fire. you watch city firefighters rescue people and battle the flames to save the buildings. 2. while visiting relatives, you learn that your cousins attend a nearby elementary school that is supported financially by local property tax revenue. 3. you see a squadron of military jets flying overhead. 4. you find out that your aunt works for a defense manufacturing company that has several defense contracts with the government. she tells you that she works for a team that is producing a communications satellite. 5. your class visits a local jail run by a private, profit-making company that detains county criminals and is paid with tax revenue.

You are thinking of making your mansion more energy efficient by replacing some of the light bulbs with compact fluorescent bulbs, and insulating part or all of your exterior walls. each compact fluorescent light bulb costs $4 and saves you an average of $2 per year in energy costs, and each square foot of wall insulation costs $1 and saves you an average of $0.20 per year in energy costs.† your mansion has 150 light fittings and 3000 sq ft of uninsulated exterior wall. to impress your friends, you would like to spend as much as possible, but save no more than $750 per year in energy costs (you are proud of your large utility bills). how many compact fluorescent light bulbs and how many square feet of insulation should you purchase? how much will you save in energy costs per year? (if an answer does not exist, enter dne.)

From what part of income should someone take savings?