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:

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