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

question 10

Multiple Choice

Exhibit 5-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{ccccc}\text { Stock } & \mathrm{R}_{\text {it }} & \mathrm{R}_{\text {mt }} & \mathrm{a}_{\mathrm{i}} & \text { Beta } \\\hline \mathrm{A} & 10.6 & 15 & 0 & 0.8 \\\mathrm{Z} & 9.8 & 8.0 & 0 & 1.1\end{array}$
R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 5-5. What is the abnormal rate of return for Stock Z when you consider its systematic risk measure (beta) ?

• A) 0.1%
• B) 1.0%
• C) 0.5%
• D) -1.0%
• E) -2.0%

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Definitions:

Incidental Learning

The process of learning that occurs without the intention to learn, often as a byproduct of other activities.

Directed Exposure

A deliberate effort to attend to specific information sources or stimuli, usually for the purpose of obtaining information or entertainment.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without the necessity for prior learning or conditioning.

Highly Visible

Referring to objects or actions that are easily seen or noticed by many people, often used in marketing to describe products that attract attention.