Security a Has an Expected Rate of Return of 0

question 39

Multiple Choice

Security A has an expected rate of return of 0.10 and a beta of 1.3.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)-1.8%.
• C)8.3%.
• D)5.5%.
• E)none of the above.

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Definitions:

Hindbrain

The posterior part of the brain that includes the cerebellum and brainstem, involved in regulating basic bodily functions.

Motor Output Signals

Neural impulses that convey information from the brain or spinal cord to muscles, facilitating movement.

Cortex

The outer layer of the brain, involved in high-level functions such as conscious thought, memory, and decision making.

Cortical Regions

Areas of the cerebral cortex of the brain, each associated with various functions such as sensory processing, motor control, and cognition.