Use the Information for the Question(s)below

question 119

Multiple Choice

Use the information for the question(s) below.
Suppose that the risk-free rate is 5% and the market portfolio has an expected return of 13% with a volatility of 18%.Monsters Inc.has a 24% volatility and a correlation with the market of .60,while California Gold Mining has a 32% volatility and a correlation with the market of -.7.Assume the CAPM assumptions hold.
-Suppose that California Gold Mining's expected return is 2%.Then California Gold Mining's alpha is closest to:

• A)-3%.
• B)-13%.
• C)7%.
• D)-11%.

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Definitions:

Paresthesia

An abnormal sensation, typically tingling or pricking ('pins and needles'), caused by pressure on or damage to peripheral nerves.

Cephalalgia

A medical term referring to pain located in the head, commonly known as a headache.

Cerebral Palsy

A neurological disorder caused by brain damage around the time of birth, affecting movement and muscle tone.

Sensory

Pertaining to the senses or sensation, involving the reception and transmission of stimuli to the central nervous system.