Analysis of Past Monthly Movements in IBM's Stock Price Produces

question 1

Multiple Choice

Analysis of past monthly movements in IBM's stock price produces the following estimates: α = 2.5 percent and β = 1.6. If the market index subsequently rises by 12 percent in one month and IBM's stock price increases by 20 percent, what is the abnormal change in IBM's stock price?

• A)+1.7 percent
• B)+8 percent
• C)−1.7 percent
• D)+2.5 percent

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Definitions:

Reinforcement

In behavioral psychology, it refers to a consequence that strengthens an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Meteors

Bright streaks of light in the sky produced by small dust or rock fragments entering Earth's atmosphere and burning up, often called "shooting stars."

Continuous Schedule

A reinforcement schedule in which every occurrence of a desired behavior is reinforced.

Reinforced

Strengthened or emphasized, often used in the context of behaviors being increased through positive or negative reinforcement.