Analysis of Past Monthly Movements in IBM's Stock Price Produces

question 1

Multiple Choice

Analysis of past monthly movements in IBM's stock price produces the following estimates: α = 2.5 percent and β = 1.6. If the market index subsequently rises by 12 percent in one month and IBM's stock price increases by 20 percent, what is the abnormal change in IBM's stock price?

• A)+1.7 percent
• B)+8 percent
• C)−1.7 percent
• D)+2.5 percent

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Definitions:

Herniated Disk

A condition where a disk in the spine slips or ruptures, potentially pressing on nearby nerves and causing pain or other symptoms.

Ethmoidal

Pertaining to the ethmoid bone, a spongy, cubical bone contributing to the structure of the nasal cavity and the orbits of the eyes.

Sphenoidal

Pertaining to the sphenoid bone, often referencing the sphenoidal sinus located within this bone.

Frontal

Referring to the forehead or the front part of something, particularly the frontal lobe of the brain which is involved in decision making, problem solving, and controlling behavior.