Exhibit 65
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 7

Multiple Choice

Exhibit 6.5
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c c c c } \text { Stock } & \mathbf { R } _ { \text {it } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\\hline \mathrm { A } & 10.6 & 15 & 0 & 0.8 \\\mathrm { Z } & 9.8 & 8.0 & 0 & 1.1\end{array}$$ R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 6.5. What is the abnormal rate of return for Stock Z during period t using only the aggregate market return (ignore differential systematic risk) ?

• A)1.80
• B)1.40
• C)-1.80
• D)-4.80
• E)-8.80

Understand the decision-making process for investments, including considerations of interest rates and returns.

Comprehend the role and impact of government monetary policy on the economy, including interest rates.

Understand how inflation affects interest rates and the real cost of borrowing.

Understand the principles of investment decisions based on expected returns and interest rates.

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Definitions:

Treat

To deal with or act towards someone or something in a specified manner, often with kindness or to provide medical care.

Self-Modification Program

A structured process or set of practices designed for individuals to alter their behavior or improve specific aspects of their lives through self-directed change.

Study Habits

The consistent practices and routines that individuals use to acquire and retain information efficiently.

Operant-Conditioning Phenomena

A learning process where behavior is controlled by consequences like rewards or punishments.