Use the Information for the Question(s)below

question 119

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 California Gold Mining's expected return is 2%.Then California Gold Mining's alpha is closest to:

• A)-3%.
• B)-13%.
• C)7%.
• D)-11%.

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Definitions:

Perception Stimulation

Techniques or activities aimed at enhancing or triggering sensory responses to improve the processing of sensory information.

Humanism

A philosophical stance that emphasizes the value and agency of human beings, individually and collectively.

Andragogy

The art and science of helping adults learn, differing from pedagogy, which focuses on the education of children.

Multiple Intelligences

A theory proposed by Howard Gardner, suggesting that individuals have different kinds of intelligences, including linguistic, logical-mathematical, musical, bodily-kinesthetic, spatial, interpersonal, and intrapersonal.