Using the Index Model,the Alpha of a Stock Is 3

question 65

Multiple Choice

Using the index model,the alpha of a stock is 3.0%,the beta if 1.1 and the market return is 10%.What is the residual given an actual return of 15%?

• A) 0.0%
• B) 1.0%
• C) 2.0%
• D) 3.0%

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Definitions:

Vertebra

One of the small bones forming the backbone, providing support and protecting the spinal cord.

Transverse Processes

Projections on vertebrae where muscles and ligaments attach, part of the bone's anatomy.

Spinous Processes

Bony projections off the back of each vertebra that can be felt through the skin and serve for muscle and ligament attachment.

Winglike Side Projections

Structural or anatomical parts extending from the side of an object or body, resembling the wings of a bird or insect in shape or function.