Exhibit 92
Use the Information Below for the Following Problem(S)
Consider

question 50

Multiple Choice

Exhibit 9.2
Use the Information Below for the Following Problem(S)
Consider the three stocks, stock X, stock Y and stock Z, that have the following factor loadings (or factor betas) .
$$\begin{array} { c c c } \text { Stack } & \text { Factor 1 Londine } & \text { Factor } 2 \text { Londing } \\\hline X & - [ .55 & 1.2 \\Y & - [ .10 & 0.85 \\Z & 0.35 & 0.5\end{array}$$
The zero-beta return (??) = 3%, and the risk premia are ?? = 10%, ?? = 8%. Assume that all three stocks are currently priced at $50.
-Refer to Exhibit 9.2.The new prices now for stocks X,Y,and Z that will not allow for arbitrage profits are

• A) $53.55, $54.4, $55.25
• B) $45.35, $54.4, $55.25
• C) $55.55, $56.35, $57.15
• D) $50, $50, $50
• E) $51.35, $47.79, $51.58.

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Definitions:

Visual Images

Representations of objects or scenes that are perceived with the eyes or created in the mind.

Achromatic Color

Colors without hue, including black, white, and all shades of gray, referring to colors that do not contain a chromatic component.

Blue

A primary color in the visible spectrum, associated with feelings of calmness or sadness in various contexts.

Shades Of Colors

Variations in hue, saturation, and brightness that distinguish one color from another.