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

question 34

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 β_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
• E)none of the above

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Definitions:

Conditioned Emotional

An emotional response that has been learned through conditioning, where a neutral stimulus becomes associated with an emotional event.

Fear Response

A physiological reaction to perceived threats that prepares the body for fight or flight.

Conditioned Taste Aversions

An acquired response where an individual avoids a food or flavor that has previously been associated with illness or discomfort.

Coyotes

A species of canine found throughout North and Central America, adaptable and known for its cunning and ability to live in both wild and urban areas.