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

question 32

Multiple Choice

The index model for stock A has been estimated with the following result: R_A = 0.01 + 0.94R_M + e_A
If $\sigma$ _M = 0.30 andR²_A = 0.28, the standard deviation of return of stock A is

• A)0.2025.
• B)0.2500.
• C)0.4500.
• D)0.5329.

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Definitions:

Melanin

A pigment produced by melanocytes in the skin, hair, and eyes, responsible for coloration and protection against ultraviolet (UV) light damage.

Oxygen

A chemical element (O) essential for most forms of life on Earth, vital for cellular respiration in organisms.

Friction

The resistance encountered when one object is moved in contact with another.

Pressure

The force exerted per unit area on the surface of an object, often measured in atmospheres, Pascals, or mmHg.