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

question 50

Multiple Choice

The index model for stock B has been estimated with the following result:R_B = 0.01 + 1.1R_M + e_B.If σ_M = 0.20 and R²_B = 0.50, the standard deviation of the return on stock B is

• A) 0.1111.
• B) 0.2111.
• C) 0.3111.
• D) 0.4111.

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Definitions:

Polymorphism

Polymorphism is a concept in object-oriented programming that allows objects of different classes to be treated as objects of a common superclass, enabling a single interface to control the access to the specific method implementations.

Late Binding

A programming mechanism where method calls are resolved at runtime rather than compile time.

Method Definition

The part of a class where the behavior of a method is specified, including its return type, parameters, and body.

Method Invocation

The process of calling or executing a method in a program, which may involve passing arguments and receiving a return value.