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Compute how much each of the following is worth in terms of today's dollars using 197 as the price index for today.
a. In 1936, the CPI was 17.7 and the price of a movie ticket was $0.25
b. In 1942, the CPI was 13.1 and a cook earned $15.00 a week
c. In 1953, the CPI was 17.4 and a litre of gas cost $0.06
Intercept
The point where a line, curve, or surface intersects a coordinate axis.
Alpha
Alpha is a measure used in finance to describe an investment strategy's ability to beat the market, or its "excess return" relative to the return of the benchmark index.
Index Model
A model of stock returns using a market index such as the S&P 500 to represent common or systematic risk factors.
Covariance
A measure indicating the relationship between two variables and how they move together or apart from each other, used in finance to measure how the returns of two securities are related.
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