Analysis of Past Monthly Movements in IBM's Stock Price Produces

question 44

Multiple Choice

Analysis of past monthly movements in IBM's stock price produces the following estimates: α = 2. 5% and β = 1. 6. If the market index subsequently rises by 12% in one month and IBM's stock price increases by 20%, what is the abnormal change in IBM's stock price?

• A) +1.7%
• B) +8%
• C) -1.7%
• D) None of the above

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Definitions:

New Product Introductions

The process of bringing a new product to the market, including development, marketing, and commercialization phases.

Existing Product Improvements

Enhancements made to products already available in the market to increase their value, functionality, or appeal to consumers.

Process Innovation

The adoption of a novel or substantially enhanced method for producing or distributing offerings in business processes.

Assembly Method

A process in manufacturing where parts are put together to make a final product.