Samantha Xiao is trying to get some insight into the relationship between the return on stock LMD ($R_{LMD,t}$) and the return on the S&P 500 index ($R_{S\&P,t}$). Using historical data she estimates the following:

• Annual mean return for LMD: 11%

• Annual mean return for S&P 500 index: 7%

• Annual volatility for S&P 500 index: 18%

• Covariance between the returns of LMD and S&P 500 index: 6%

Assuming she uses the same data to estimate the regression model given by:

$$R_{LMD,t} = \alpha + \beta R_{S\&P,t} + \varepsilon_t$$

Using the ordinary least squares technique, which of the following models will she obtain?