1. When evaluating stock performance, ____ measures variability that is systematically related to market returns; ____ measures total variability of a stock's returns.

a. alpha; beta

b. the S&P 500 index; VIX

c. beta; standard deviation

d. standard deviation; beta

2. If security prices fully reflect all market-related information (such as historical price patterns) but do not fully reflect all other public information, security markets are

a. perfectly inefficient

b. perfectly efficient

c. weak-form efficient.

d. semi-strong form efficient.

e. strong form efficient.

f. B and C

g. none of the above

3. A stock's beta is estimated to be 1.5. Assume the T-bill rate is 1 percent, and the market return is expected to be 9 percent. What is the expected return on the stock based on the CAPM? Answer as a percentage.