Exhibit 61
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 30

Multiple Choice

Exhibit 6.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c c c c } \text { Stock } & \mathbf { R } _ { \text {it } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\\hline \mathrm { C } & 12 & 10 & 0 & 0.8 \\\mathrm { E } & 10 & 8.0 & 0 & 1.1\end{array}$$ R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 6.1. What is the abnormal rate of return for Stock C during period t using only the aggregate market return (ignore differential systematic risk) ?

• A)4.0%
• B)1.2%
• C)-1.05%
• D)2.0%
• E)-8.50

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Definitions:

Cycle of Debt

A repetitive sequence where a borrower incurs new debt to pay off existing debts, often leading to worsening financial conditions.

Prevented Industrialization

The hindrance or delay of the industrial development process in a country or region, often due to external or internal factors.

Colonization

The act of establishing control over a foreign land and its people by a country or group, often leading to exploitation and cultural assimilation.

Abundant Natural Resources

The availability of a large quantity of natural materials that can be utilized for economic gain, such as minerals, forests, and water.