The Index Model Has Been Estimated for Stocks a and B

question 85

Multiple Choice

The index model has been estimated for stocks A and B with the following results: R_A = 0.01 + 0.6R_M + e_A.
R_B = 0.02 + 1.2R_M + e_B.
Σ_M = 0.30; σ(e_A) = 0.20; σ(e_B) = 0.10.
The standard deviation for stock A is

• A) 0.0656.
• B) 0.0676.
• C) 0.3499.
• D) 0.2600.

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Definitions:

Myelin

A fatty substance that forms a sheath around the axons of many neurons, serving as insulation and speeding up the transmission of nerve impulses.

Muscle Weakness

A decrease in the strength of one or more muscles, which can result from a wide range of diseases, disorders, or conditions.

Nervous System

The complex network of nerve cells and fibers that transmits nerve impulses between parts of the body.

Membrane

A thin layer of tissue that covers a surface, lines a cavity, or divides a space or organ.