The Index Model for Stock B Has Been Estimated with the Following

question 39

Multiple Choice

The index model for stock B has been estimated with the following result: R_B = 0.01 + 1.1R_M + e_B.
If $\sigma$ _M = 0.20 andR²_B = 0.50, the standard deviation of the return on stock B is

• A)0.1111.
• B)0.2111.
• C)0.3111.
• D)0.4111.

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A fixed amount of tax imposed on each unit of a product or service sold.

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