Exhibit 81
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 81

Multiple Choice

Exhibit 8.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\quad\text { Rates of Return }\\\begin{array} { c c c } \text { Year } & \text { RA Computer } & \text { Market Index } \\\hline 1 & 13 & 17 \\2 & 9 & 15 \\3 & - 11 & 6 \\4 & 10 & 8 \\5 & 11 & 10 \\6 & 6 & 12\end{array}\end{array}$$
-Refer to Exhibit 8.1. The equation of the characteristic line for RA is

• A)R_RA = 11.63 + 1.2195R_MI
• B)R_RA = -7.98 + 1.1023R_MI
• C)R_RA = -9.41 + 1.3893R_MI
• D)R_RA = -4.92 - 0.7715R_MI
• E)R_RA = 4.92 + 0.7715R_MI

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Definitions:

Cafeteria-Style Benefits Plans

Allow employees to choose those benefits they really want.

Adverse Selection

A situation in economics and insurance where a party’s lack of information leads to a transaction with another party who has a distinct advantage, often seen in markets for goods like used cars or in health insurance.

Benefit Costs

The expenses incurred by an organization in providing benefits such as health insurance, retirement plans, and leave entitlements to its employees.

The Cobra Effect

Unintended negative consequences resulting from attempts to solve a problem, often exacerbating the original issue.