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Consider the Single-Index Model

question 87

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Consider the single-index model.The alpha of a stock is 0%.The return on the market index is 10%.The risk-free rate of return is 3%.The stock earns a return that exceeds the risk-free rate by 11%, and there are no firm-specific events affecting the stock performance.The β of the stock is

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Definitions:

Selection

The process of choosing from among alternatives based on certain criteria, often used in contexts like recruitment or information processing.

Similar-To-Me Effect

The tendency of individuals to favor or rate more positively those who are perceived to be similar to themselves in some manner.

Attribute

A quality, feature, or inherent part of someone or something that defines or contributes to its nature or character.

Selection Fairness

The equitable and unbiased process of choosing among candidates or alternatives in various contexts including recruitment.

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