Exhibit 62
Use the Information Below for the Following Problem(S)

question 27

Multiple Choice

Exhibit 6.2
Use the Information Below for the Following Problem(S)
$$\begin{array} { c c c c c } \text { Stack } & \mathrm { R } _ { \mathbf { i t } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\\hline \text { ABC } & 11.5 & 13.0 & 0 & 0.7 \\\text { XYZ } & 90 & 70 & 0 & 1 .1\end{array}$$
R_it= return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 6.2.What is the abnormal rate of return for Stock ABC during period t using only the aggregate market return (ignore differential systematic risk) ?

• A) 3.2%
• B) 2.4%
• C) 1.3%
• D) -1.5%
• E) 2.0%

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Definitions:

Contingent Liability

A potential obligation that may arise depending on the outcome of an uncertain future event, which is not confirmed at the date of the financial statements.

Fair Value

What would be pocketed from an asset sale or the price to offload a liability during a methodical engagement with market individuals on the day of measurement.

Present Obligation

A duty or responsibility to act or perform in a certain way.

Goodwill

The intangible asset that arises when a buyer acquires an existing business but pays more than the fair market value of the net assets.