USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 38

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 5.6. Stock X had an actual return of 14 percent, and Stock X's normal return based on the market's return for the same period was 13.6 percent. What is Stock X's abnormal rate of return?

• A) -0.4 percent
• B) 0.1 percent
• C) 0.4 percent
• D) 4.0 percent
• E) 6.4 percent

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