So, this one had me thrown a little bit. The statement says that the plot is of residuals from the regression. The graph has 
as the axis and Firm as the other.
Anyone want to explain to me what the heck is going on in this question? I'm fine with a separate alpha and beta being fit per security in regression, but is there a reason the alpha parameter is considered a residual? And if the alphas are fit to various positive values this doesn't really mean anything without the error of the fit on alpha since they could all be insignificant, couldn't they?
as the axis and Firm as the other.Anyone want to explain to me what the heck is going on in this question? I'm fine with a separate alpha and beta being fit per security in regression, but is there a reason the alpha parameter is considered a residual? And if the alphas are fit to various positive values this doesn't really mean anything without the error of the fit on alpha since they could all be insignificant, couldn't they?
2011 Q3
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