Question

To estimate a stock's beta from historical data, we should regress the (excess) return of the stock on the (excess) return of _____.

Answer 1

Answer:the market portfolio

Step-by-step explanation:

The beta is simply used to determine the movement of an individual asset when there's a rise or decrease in the entire stock market.

Therefore, to estimate a stock's beta from historical data, we should regress the (excess) return of the stock on the (excess) return of market portfolio.