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

question 37

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 A when you consider its systematic risk measure (beta) ?

• A)1.40%
• B)-1.40%
• C)2.80%
• D)-2.80%
• E)None of the above

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Definitions:

Marginal Benefit

The enhancement in satisfaction or utility that comes from acquiring or making an additional unit of a product or service.

Pollution Control

The implementation of measures to reduce or eliminate the emission of pollutants into the environment.

Pollution Abatement

Measures and efforts taken to reduce, control, or eliminate pollution from a particular source.

Negative Externalities

Costs that are suffered by a third party as a result of an economic transaction that they were not directly involved in.