The Index Model for Stock a Has Been Estimated with the Following

question 16

Multiple Choice

The index model for stock A has been estimated with the following result: R_A = 0.01 + 0.9R_M + e_A.
If σ_M = 0.25 and R²_A = 0.25, the standard deviation of return of stock A is

• A) 0.2025.
• B) 0.2500.
• C) 0.4500.
• D) 0.8100.

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Definitions:

Comfort Food

Food that provides a nostalgic or sentimental value to someone, often high in calories or carbohydrates, and easily consumed, which supposedly provides comfort or relieves stress.

Social Factors

Elements within society such as family, culture, and education that influence an individual's living conditions and personal choices.

Insulin

A hormone secreted by the pancreas to control the levels of fats, proteins, and carbohydrates in the body by reducing the level of glucose in the bloodstream.

Glucagons

A hormone produced by the pancreas that raises blood glucose levels, an important counter-regulatory hormone in the blood glucose regulation system.