Risk-adjusted stock return

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Reference no: EM131798731

A capital asset pricing model (CAPM) for Johnson & Johnson (J&J) was discussed in Example 15.3. The model uses the risk-adjusted stock return R - Rf for J&J as the response variable and the risk-adjusted market return RM - Rf as the explanatory variable. The data for the model can be found on the text website, labeled Johnson & Johnson. Since serial correlation may occur with time series data, it is prudent to inspect the behavior of the residuals. Construct a scatterplot of the residuals against time to comment on serial correlation.

Reference no: EM131798731

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