What information does the alpha provide an investor

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Reference no: EM132042995

Use Yahoo Finance to download the historical prices for Caterpillar (CAT) and (SPY).

For the purposes of this assignment and given the recent interest rate environment, you may assume a riskfree rate of 0% when running the regression.

However, note that this will not always be the case, and normally we would subtract the risk-free rate from each return. Please staple your regression output (reduced to one single printed page) to this document to turn in.

What is CAT's alpha? What information does the alpha provide an investor? Interpret the alpha in terms of magnitude and significance.

Reference no: EM132042995

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