Consider the Single-Index Model $\beta$ Of the Stock Is
A)0

question 46

Multiple Choice

Consider the single-index model.The alpha of a stock is 0%.The return on the market index is 10%.The risk-free rate of return is 5%.The stock earns a return that exceeds the risk-free rate by 5%, and there are no firm-specific events affecting the stock performance.The $\beta$ of the stock is

• A)0.67.
• B)0.75.
• C)1.0.
• D)1.33.

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Definitions:

Strong-Form Efficient

A hypothesis that states all information, both public and private, is completely reflected in stock prices, and no one can consistently achieve higher returns.

Realized Return

The actual gain or loss experienced on an investment over a specified period, taking into account dividends, interest, and capital gains.

Closing Stock Market Quotes

The final listing of the price of a security at the close of a trading day on a stock exchange.

Buy Or Sell Stock

The action of purchasing (buying) or offloading (selling) shares of a company through a stock exchange or other trading platforms.