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Abnormal change in ford stock price

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An index model regression applied to past monthly returns in Ford's stock price produces the following estimates, which are believed to be stable over time:

rF = 8% + 7rM

If the market index subsequently rises by 0.1 and Ford's stock price rises by 0.05, what is the abnormal change in Ford's stock price?
Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.

Reference no: EM132711651

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