Use the Information for the Question(s)below

question 82

Multiple Choice

Use the information for the question(s) below.
Suppose that the risk-free rate is 5% and the market portfolio has an expected return of 13% with a volatility of 18%.Monsters Inc.has a 24% volatility and a correlation with the market of .60,while California Gold Mining has a 32% volatility and a correlation with the market of -.7.Assume the CAPM assumptions hold.
-Suppose that Monsters' expected return is 12%.Then Monsters' alpha is closest to:

• A)-2.0%.
• B)-1.0%.
• C)1.0%.
• D)0.5%.

---

Definitions:

Multiple Personality Disorder

Now known as Dissociative Identity Disorder; a psychological disorder characterized by the presence of two or more distinct personality states.

Autism Spectrum Disorder

A range of neurodevelopmental conditions characterized by challenges with social skills, repetitive behaviors, speech, and nonverbal communication.

Cortisol

A steroid hormone produced by the adrenal glands that regulates a wide range of processes in the body, including metabolism and immune response.

Stress Hormone

Hormones, such as cortisol, that are released into the body in response to stress, affecting various bodily functions.