Question: An index model regression applied to past monthly excess returns in ABC Corporations stock price produces the following estimates, which are believed to be stable

An index model regression applied to past monthly excess returns in ABC Corporation’s stock price produces the following estimates, which are believed to be stable over time:
RABC = .10% + 1.1RM
If the market index subsequently rises by 8 percent and ABC’s stock price rises by 7 percent, what is the abnormal change in ABC’s stock price? The T- bill return during the month is 1 percent.

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