Quants- Forecasting return
Intercept coefficient- 0.148923
large cap index- 1.205602
If the large capitalization index has a 10% return, then the forecast of the fund’s return will be:
The forecast is 12.209 = 0.149 + 1.206 × 10, so the answer is 12.2.
My question is when to take input as a % and when to take decimal? In this example, they used a % form. However, most of the times I have seen input in a decimal form.
Can someone please clarify. Thanks.
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