Analysis of Past Monthly Movements in IBM's Stock Price Produces

question 52

Multiple Choice

Analysis of past monthly movements in IBM's stock price produces the following estimates: α = 2.5% and β = 1.6.If the market index subsequently rises by 12% in one month and IBM's stock price increases by 20%,what is the abnormal change in IBM's stock price?

• A)+1.7%
• B)+8.0%
• C)-1.7%
• D)+2.5%

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Definitions:

Melatonin

A hormone produced by the pineal gland, regulating sleep and wakefulness.

Bright Light

Involves the exposure to intense levels of light, often used as a treatment modality for certain disorders such as seasonal affective disorder.

Circadian Rhythm

The physical, mental, and behavioral changes that follow a 24-hour cycle, responding primarily to light and darkness in an organism's environment.

Fall Asleep

The transition from wakefulness into sleep, a natural periodic state of rest for the mind and body.