Exhibit 5-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 67

Multiple Choice

Exhibit 5-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{ccccc}\text { Stock } & \mathrm{R}_{\text {it }} & \mathrm{R}_{\text {mt }} & \mathrm{a}_{\mathrm{i}} & \text { Beta } \\\hline \mathrm{A} & 10.3 & 12 & 0 & 0.6 \\\text { B } & 9.4 & 9.0 & 0 & 1.2\end{array}$
R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 5-4. What is the abnormal rate of return for Stock A during period t using only the aggregate market return (ignore differential systematic risk) ?

• A) 3.34
• B) 1.75
• C) -1.75
• D) -3.70
• E) -1.70

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Definitions:

Seriation

The cognitive ability to arrange objects in order by some attribute, such as size, color, or number.

Sternberg's Three Intelligences

A theory by psychologist Robert Sternberg that divides intelligence into three parts: analytical, creative, and practical intelligence.

Monozygotic Twin Pairs (MZ)

Identical twins that result from a single fertilized egg splitting, sharing the same genetic material.

Concordance

Concordance refers to the degree of similarity in the presence of a certain trait or condition, especially in twins, indicating the role of genetic factors.