Financial Risk Manager Part 1
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An analyst uses the following regression model to explain stock returns:
Dependent variable:
ASR = Annual stock returns (%)
Independent variables:
MCP = Market capitalization (divided by $1 million to simplify modeling)
SEF = Stock exchange firm, where SEF = 1 if the stock is that of a firm listed on the New York Stock Exchange and SEF = 0 if not listed
Explanation:
The provided text appears to be incomplete as it only shows the setup of a regression model but does not contain any actual question, options, or answer choices. The text describes:
- Dependent variable: ASR (Annual stock returns in %)
- Independent variables:
- MCP (Market capitalization divided by $1 million)
- SEF (Stock exchange firm dummy variable: 1 for NYSE listed, 0 otherwise)
However, there is no question stem, multiple choice options, or answer provided in the text. Without the complete question and answer choices, I cannot extract a valid multiple-choice question for the FRM Part 1 certification preparation.