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

question 25

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
• E)none of the above

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Definitions:

Serotonin Reuptake

The process by which serotonin is reabsorbed by a nerve cell after it has been released into a synapse.

Glutamate Release

The process by which the neurotransmitter glutamate is expelled from the presynaptic neuron into the synaptic cleft, where it can then bind to and activate receptors on the postsynaptic neuron.

Mesolimbic Dopamine Pathway

A key component of the brain's reward system, involved in the regulation of pleasure, reward, and motivation, primarily using the neurotransmitter dopamine.

Mesocortical Pathway

A neural pathway connecting the ventral tegmental area of the brain to the prefrontal cortex, involved in cognition and emotion.