Use the Following Information to Answer the Question(s)below

question 31

Multiple Choice

Use the following information to answer the question(s) below.
-Using the average historical excess returns for both Wyatt Oil and the Market portfolio estimate of Wyatt Oil's Beta.When using this beta,the alpha for Wyatt oil in 2007 is closest to:

• A)-0.5000%
• B)-0.0250%
• C)-0.0125%
• D)+0.0250%

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Definitions:

Default Risk Premiums

The additional yield that investors demand for holding a bond that has a risk of default over a risk-free security.

Treasury Bond

A long-term, interest-bearing security issued by the government, with a maturity period typically longer than ten years.

Xerox

A corporation known primarily for its photocopying products and technology, though it has diversified into digital printing and document solutions.