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

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Definitions:

Clan Control

A method of control relying on shared values, traditions, norms, and beliefs to guide employee behavior and decisions within an organization.

Control Process

A systematic sequence of activities involving setting performance standards, measuring actual performance, and taking corrective action to ensure objectives are achieved.

Control Process

A method of regulating operations, systems, or activities to meet standards and ensure objectives are achieved efficiently.

Market Control

The ability of a firm or entity to influence or dictate terms and conditions within a particular market.