A Security Has an Expected Rate of Return of 0

question 20

Multiple Choice

A security has an expected rate of return of 0.15 and a beta of 1.25. The market expected rate of return is 0.10, and the risk-free rate is 0.04. The alpha of the stock is

• A) 1.7%.
• B) −1.7%.
• C) 8.3%.
• D) 3.5%.

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Definitions:

Sleep Apnea

A disorder marked by repeated interruptions of breathing during sleep due to the blockage of the upper airways or improper brain signals.

Narcolepsy

A condition where an individual experiences overwhelming sleepiness during the day and unexpected sleep episodes.

Sleeping Pill

A type of medication used to induce sleep or improve the quality of sleep in individuals with insomnia or other sleep disorders.

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A sleep disorder where an individual has difficulty falling asleep, staying asleep, or experiences non-restorative sleep.