Using the Single Index Model, What Is the Alpha of a Stock

question 26

Multiple Choice

Using the single index model, what is the alpha of a stock with beta of 1.2, a market return of 14%, risk free rate of 3% and the actual return of the stock is 18%?

• A) −1.37%
• B) 0.75%
• C) 1.80%
• D) 2.11%
• E) −3.12%

Comprehend the effects of team size, diversity, and competition on team cohesion.

Acknowledge the role of team leadership and communication in promoting effective teamwork.

Distinguish between task, maintenance, and disruptive activities within a team context.

Understand the concept of a communication network and its importance in team functionality.

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Definitions:

Appliance Manufacturer

A company engaged in the production of domestic or commercial electrical or mechanical devices.

Industrial Location Analysis

The process of evaluating the best geographical location for a company's manufacturing activities based on factors like costs, supplies, and market access.

Exchange Rates

Exchange rates are the value at which one currency can be exchanged for another, impacting international trade, investments, and economic policies.

Union Labour Prices

The costs associated with hiring labor that is part of a labor union, often including higher wages and benefits.