Analysis of Past Monthly Movements in Wal-Mart's Stock Price Has

question 36

Multiple Choice

Analysis of past monthly movements in Wal-Mart's stock price has produced the following estimates: α = -0.45% and β = 0. 5. If the market index subsequently rises by 5% one month and Wal-Mart's stock price rises by 3%, what is the abnormal change in Wal- Mart's stock price?

• A) -0.95%
• B) +0.95%
• C) +0.05%
• D) None of the above

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Definitions:

Mean

The arithmetic average of a set of numbers, calculated by adding up all the values and dividing by the number of values.

Probability

A quantitative measure representing the likelihood or chance of a particular event or outcome occurring.

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