You Run a Regression of a Share's Returns Versus a Market

question 33

Multiple Choice

You run a regression of a share's returns versus a market index and find the following: Based on the data you know that the share

• A)earned a positive alpha that is statistically significantly different from zero
• B)has a beta precisely equal to 0.890
• C)has a beta that could be anything between 0.6541 and 1.465 inclusive
• D)has no systematic risk

---

Definitions:

Subject-matter Jurisdiction

The jurisdiction of a court to adjudicate certain types of cases or those concerning specific topics.

Restatement (Second)

is a collection of volumes that articulate the general principles of American law, especially within specific areas such as contracts or torts, aimed at clarifying and simplifying the law.

Voidable Contracts

Agreements that are valid and enforceable at the outset but can be declared void by one of the parties due to certain conditions, such as fraud or coercion.

Reasonable Manner

Conducting oneself in a way that a prudent person would consider fair and appropriate under the circumstances.