regression model
market model
error model
risk free model
Answer is Right!
Answer is Wrong!
A model which regresses return of stock against return of market is classified as
The correct answer is A. regression model.
A regression model is a statistical model that analyzes the relationship between two or more variables. In this case, the two variables are the return of a stock and the return of the market. The regression model will try to find a linear relationship between these two variables, which can be used to predict the return of a stock based on the return of the market.
The other options are incorrect.
- Option B, market model, is a type of regression model that is used to predict the return of a stock based on the return of the market. However, it is not the only type of regression model that can be used for this purpose.
- Option C, error model, is a type of statistical model that is used to estimate the error in a measurement. It is not a type of regression model.
- Option D, risk free model, is a type of financial model that is used to estimate the risk-free rate of return. It is not a type of regression model.