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

question 26

Multiple Choice

Consider the single-index model.The alpha of a stock is 0%.The return on the market index is 16%.The risk-free rate of return is 5%.The stock earns a return that exceeds the risk-free rate by 11%, 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:

Amortized

The process of spreading the cost of an intangible asset over its useful life, or the gradual reduction of a debt through regular payments of principal and interest over a set period.

Undervalued Equipment

Equipment whose market value is higher than its book value or valuation on financial statements, suggesting it may be worth more than it appears.

Non-Controlling Interest

A share in the equity and profits of a subsidiary that are not owned by the parent company.

Goodwill Impairment

A write-down that occurs when the fair value of a company's goodwill asset is less than its recorded (carrying) cost, indicating a decline in the value of acquired businesses.