Exhibit 5-1
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 57

Multiple Choice

Exhibit 5-1
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{ccccc}\text { Stock } & \mathrm{R}_{\text {it }} & \mathrm{R}_{\mathrm{mt}} & \mathrm{a}_{\mathrm{i}} & \text { Beta } \\\hline \text { C } & 12 & 10 & 0 & 0.8 \\\mathrm{E} & 10 & 8.0 & 0 & 1.1\end{array}$
R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 5-1. What is the abnormal rate of return for Stock E when you consider its systematic risk measure (beta) ?

• A) 2.0%
• B) 1.2%
• C) 4.0%
• D) -1.05%
• E) -8.5%

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Definitions:

Auditory Cortex

The part of the temporal lobe that processes auditory information in humans and other vertebrates, critical for hearing.

Eardrum

A thin membrane that separates the outer ear from the middle ear and vibrates in response to sound waves.

Conduction Deafness

Hearing loss that occurs when sound waves cannot be efficiently conducted through the outer ear canal to the eardrum and the tiny bones of the middle ear.

Eardrum

A thin membrane that separates the outer ear from the middle ear and vibrates in response to sound waves, enabling hearing.