Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.

# Consider the following linear regression model:

Consider the following linear regression model:

The bi in the regression

- measures the historical performance of the security relative to the expected return predicted by the SML
- measures the diversifiable risk in returns
- measures the sensitivity of the security to market risk
- measures the deviation from the best fitting line and is zero on average.