You Run a Regression of a Stock's Returns Versus a Market

question 24

Multiple Choice

You run a regression of a stock's returns versus a market index and find the following: Based on the data you know that the stock

• A) earned a positive alpha that is statistically significantly different from zero
• B) has a beta precisely equal to 0.890
• C) has a beta that could be anything between 0.6541 and 1.465 inclusive
• D) has no systematic risk

---

Definitions:

Advertisers

Entities that promote products, services, or ideas to potential consumers through various media channels.

Demographic Profile

A statistical representation of the characteristics of a population, such as age, gender, income, and education levels.

Middle-Class Consumers

Refer to individuals within the socio-economic grouping characterized by moderate income levels, who are often targeted by marketers for their purchasing power.

Endowment

A donation made to an institution or organization that is invested to generate income, where the principal remains intact.