Exhibit 5-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 69

Multiple Choice

Exhibit 5-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{lcccc}\text { Stock } & \mathrm{R}_{\text {it }} & \mathrm{R}_{\text {mt }} & \mathrm{a}_{\mathrm{i}} & \text { Beta } \\\hline \text { ABC } & 11.5 & 13.0 & 0 & 0.7 \\\text { XYZ } & 9.0 & 7.0 & 0 & 1.1\end{array}$
R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 5-2. What is the abnormal rate of return for Stock XYZ during period t using only the aggregate market return (ignore differential systematic risk) ?

• A) -3.2%
• B) 2.4%
• C) 2.0%
• D) 1.3%
• E) -1.5%

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Definitions:

Genetically Similar

Describes organisms that share a high proportion of genes or DNA sequences.

Non-twin Siblings

Non-twin siblings are brothers or sisters who do not share the same birth event, differing from twins as they are born at different times.

Correlation Coefficients

Statistical measures that indicate the strength and direction of a relationship between two variables, ranging from -1 (a perfect negative correlation) to +1 (a perfect positive correlation).

Adoptive Parents

Individuals or couples who legally assume the parenting responsibilities for a child who is not their biological offspring.