USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 134

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 5.4. What is the abnormal rate of return for Stock B when you consider its systematic risk measure (beta) ?

• A) 0.1 percent
• B) -1.4 percent
• C) 0.5 percent
• D) 1.5 percent
• E) 2.0 percent

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Definitions:

Law of Effect

A principle in psychology that behaviors followed by positive outcomes are likely to be repeated, while those followed by negative outcomes are not.

Premise

A premise is a previous statement or proposition from which another is inferred or follows as a conclusion.

Self-efficacy Theory

A psychological theory asserting that an individual’s belief in their own ability to succeed influences their motivation and performance in various settings.

Confidence

A feeling of self-assurance arising from one's appreciation of their own abilities or qualities.