Exhibit 93
Use the Information Below for the Following Problem(S)
Stocks

question 48

Multiple Choice

Exhibit 9.3
Use the Information Below for the Following Problem(S)
Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (??) = .025 and the risk premiums for the two factors are (??) = .12 and (??) = .10.
$$\begin{array} { c c c } \text { Stack } & \text { Factor } 1 w _ { i 1 } & \text { Factor } 2 w _ { i 2 } \\\hline \mathrm { A } & - 0.25 & 1.1 \\\mathrm {~B} & - 0.05 & 0.9 \\\mathrm { C } & 0.01 & 0.6\end{array}$$
-Refer to Exhibit 9.3.Calculate the expected returns for stocks A,B,C.
    A   B     C

• A) 0.082  0.091  0.033
• B) 0.105  0.109  0.032
• C) 0.132  0.128  0.033
• D) 0.165  0.121  0.032
• E) 0.850  0.850  0.610

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Definitions:

Machine-Hours

A measurement used in allocating manufacturing costs to products, representing the number of hours a machine is operated during the production process.

Predetermined Overhead Rate

The predetermined overhead rate is calculated before a period begins by dividing estimated overhead costs by an estimated allocation base, used to assign overhead costs to products.

Machine-Hours

A measure of production time, describing how many hours a machine is in operation.

Job-Order Costing

A cost accounting system that accumulates costs per job rather than by process, suitable for firms producing unique products or jobs.