Question: Background: A realized return is the return that actually occurs over some period of time (like a year). With that in mind. define the following:
Background: A realized return is the return that actually occurs over some period of time (like a year). With that in mind. define the following: - q =realized return for stocki - tm = realized return for the overailstock market - 11- realized return for a T-bili. In a CAPM world, we can think of a stock'srealized retum as the following: fi=ri=brfa(mmri)+ abnormil return Here, the "normul return" is the part of the realized return that is explained by the CAPM. This means the stock's "normal" return is equal to of = ef + beta" (tmf) and the "abnormal" return is "evervthing else" or the part of the realized return not explained by the CAPM. We might also refer to the abnormal refurn a talphat Now to the actual problemn 135 . what was the stock's ABNORMAL return? Enter wour answer as a decimal showing foor decimal places. That is, if your answer is 5.25% enter 0525
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