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

question 16

Multiple Choice

The index model for stock A has been estimated with the following result: R_A = 0.01 + 0.9R_M + e_A.
If σ_M = 0.25 and R²_A = 0.25, the standard deviation of return of stock A is

• A) 0.2025.
• B) 0.2500.
• C) 0.4500.
• D) 0.8100.

---

Definitions:

Intravenous Pyelography

A diagnostic imaging test that involves an X-ray exam of the kidneys, ureters, and bladder after the injection of a contrast material.

Allergic Response

The body's immune system's reaction to a substance it mistakenly identifies as harmful, leading to symptoms such as itching, swelling, or sneezing.

Cystitis

Inflammation of the urinary bladder.

Artificial Veins

Synthetically made veins used to replace or bypass damaged or diseased veins, commonly applied in medical procedures to restore normal blood flow.