QUESTION 1 Exhibit 5.5 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stock Rit Rmt ai Beta A 10.6 15 0 0.8 Z 9.8 8.0 0 1.1 Rit = return for stock i during period t Rmt = return for the aggregate market during period t Refer to Exhibit 5.5. What is the abnormal rate of return for Stock A during period t using only the aggregate market return (ignore differential systematic risk)? a. 4.40 b. −1.70 c. 3.40 d. −4.40 e. −1.86

QUESTION 1 Exhibit 5.5 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stock R it R mt a i Beta A 10.6 15 0 0.8 Z 9.8 8.0 0 1.1 R it = return for stock i during period t R mt = return for the...

Exhibit 5.5

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Stock

R_it

R_mt

a_i

Beta

A

10.6

15

0

0.8

Z

9.8

8.0

0

1.1

R_it = return for stock i during period t

R_mt = return for the aggregate market during period t

Refer to Exhibit 5.5. What is the abnormal rate of return for Stock A during period t using only the aggregate market return (ignore differential systematic risk)?

a.
4.40

b.
−1.70

c.
3.40

d.
−4.40

e.
−1.86

Jun 10, 2022