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

question 66

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 ABC during period t using only the aggregate market return (ignore differential systematic risk) ?

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

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Definitions:

Economic Growth

An increase in the production of economic goods and services, compared from one period of time to another.

Immigration

The process of permanently relocating to a country that is not one's native homeland.

Productivity Growth

The rate at which a company or economy can produce more goods and services with the same amount of labor, capital, energy, and materials, often seen as a key driver of economic growth.

Savings Rate

The proportion of disposable income that is saved by households rather than spent on goods or services.