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

question 26

Multiple Choice

The index model for stock A has been estimated with the following result:
R_A= 0.01 + 0.94R_M+ e_A
If β_M= 0.30 and R²_A= 0.28,the standard deviation of return of stock A is _________.

• A)0.2025
• B)0.2500
• C)0.4500
• D)0.5329
• E)none of the above

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Definitions:

ECT

Electroconvulsive Therapy, a psychiatric treatment in which seizures are electrically induced in patients to provide relief from mental disorders, especially severe depression.

Cognitive Side Effects

Unintended changes in thinking, memory, or other cognitive functions that may result from medication, treatment, or disease.

Short-term Memory

A type of memory responsible for temporarily holding a small amount of information in mind in an accessible state for a short period.

ECT

Electroconvulsive therapy, a medical treatment most commonly used for severe major depression which involves brief electrical stimulation of the brain while the patient is under anesthesia.