Use the Following Information to Answer the Question(s) Below

question 29

Multiple Choice

Use the following information to answer the question(s) below.

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New information arrives that does not change any of these numbers, but it does change the expected returns of the following stocks:



-The expected alpha for Taggart Transcontinental is closest to:

• A)-3.00%.
• B)-1.00%.
• C)1.00%.
• D)3.00%.

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Definitions:

External Control

The perception that one's behavior and outcomes are influenced or determined by forces outside one's personal control.

Control Systems

Mechanisms and processes put in place to monitor, manage, and regulate the behavior and performance of an organization or system.

Types of Control

Various methods or systems used within an organization to regulate processes, manage resources, and guide the actions towards achieving objectives, such as bureaucratic, market, and clan control.

Project Management

The process of planning, organizing, and overseeing the completion of specific projects within an organization or team.