Security a Has an Expected Rate of Return of 0

question 13

Multiple Choice

Security A has an expected rate of return of 0.10 and a beta of 1.3. The market expected rate of return is 0.10, and the risk-free rate is 0.04. The alpha of the stock is

• A) 1.7%.
• B) −1.8%.
• C) 8.3%.
• D) 5.5%.

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Definitions:

Kinesthetic Sense

Also known as proprioception, it refers to the ability to sense body position, movement, and dynamics of our limbs in space.

Skin Senses

The sensory modalities including touch, temperature, pain, and proprioception mediated by the skin's receptors.

Largest Organ

The skin; it serves as the body's outer layer, protecting against external harm and regulating temperature.

Gate-Control Theory of Pain

A theory that suggests pain signals must pass through a "gate" in the spinal cord, which can be closed, thus blocking the pain signal, by factors in the brain or by physical stimulation of the nerves.