Exhibit 5-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 43

Multiple Choice

Exhibit 5-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $$\begin{array} { l c c c c } \text { Stack } & R _ { \text {in } } & R _ { \text {mi } } & a _ { i } & \text { Beta } \\\hline \text { Elliat } & 9.9 & 15.0 & 0 & 0.8 \\\text { Hemlick } & 9.1 & 8.0 & 0 & 1.1\end{array}$$
R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 5-3. What is the abnormal rate of return for Elliot when you consider its systematic risk measure (beta) ?

• A) -2.10%
• B) -2.00%
• C) 5.20%
• D) 14.10%
• E) None of the above

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, usually to ensure liquidity.

Manufacturing Budget

A planned budget for manufacturing operations, detailing the projected costs associated with production.

Traditional Budgeting

An approach to budgeting focusing on incremental changes to the previous year's budget rather than starting from zero.

Activity-Based Budgeting

A budgeting approach that considers the underlying activities and costs as the bases for budgets, focusing on cost drivers.