Solutions to Chapter 1

It is clear from the table that, when the market return increases by 1%, Tumblehome’s return increases, on average, by 1.5%. Therefore, ( = 1.5. If you prepare a plot of the return on Tumblehome as a function of the market return, you will find that the slope of the line through the points is 1.5. Market return(%) Average return on Tumblehome(%) ................
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