Exhibit 61
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 6

Multiple Choice

Exhibit 6.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c c c c } \text { Stock } & \mathbf { R } _ { \text {it } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\\hline \mathrm { C } & 12 & 10 & 0 & 0.8 \\\mathrm { E } & 10 & 8.0 & 0 & 1.1\end{array}$$ R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 6.1. What is the abnormal rate of return for Stock C when you consider its systematic risk measure (beta) ?

• A)4.0%
• B)1.2%
• C)2.0%
• D)-1.05%
• E)-8.5%

---

Definitions:

Path Analysis

A statistical method employed to explain the directional dependencies between multiple variables.

ANCOVA

Analysis of Covariance, a blend of ANOVA and regression, used for statistical control of one or more quantitative variables that covary with the dependent variable.

Equalize Initial Differences

Refers to the process of adjusting for variations among participants or conditions at the start of an experiment to ensure that any observed effects are due to the experimental manipulation rather than pre-existing differences.

Group Differences

Disparities or variances between the means or proportions of two or more groups in a study, implying varying effects of treatments or conditions.