Exhibit 93
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks

question 7

Short Answer

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 ( $\lambda$ ₀) = .025 and the risk premiums for the two factors are ( $\lambda$ ₁) = .12 and ( $\lambda$ ₀) = .10. $$\begin{array} { c c c } \text { Stock } & \text { Factor } 1 b _ { i 1 } & \text { Factor } 2 b _ { i 2 } \\\hline \text { A } & - 0.25 & 1.1 \\\text { B } & - 0.05 & 0.9 \\\text { C } & 0.01 & 0.6\end{array}$$
-Refer to Exhibit 9.3. Calculate the expected returns for stocks A, B, C. $\begin{array}{llll}&A&B&C\\\text { a. } & 0.082 & 0.091 & 0.033 \\\text { b. } & 0.105 & 0.109 & 0.032 \\\text { c. } & 0.132 & 0.128 & 0.033 \\\text { d. } & 0.165 & 0.121 & 0.032 \\\text { e. } & 0.850 & 0.850 & 0.610\end{array}$

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Definitions:

Work Stress

The response individuals may experience when presented with work demands and pressures that are not matched to their knowledge and abilities, challenging their ability to cope.

Individual Differences

The variations among people in their qualities, abilities, experiences, and preferences.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, involving the biological, emotional, social, and cognitive forces that activate movement towards a goal.

External Locus

A belief or perception that one's outcomes and experiences are controlled by external forces or outside factors.