Question: QUESTION 5 The following table shows the beta and expected return for each of five stocks. Stock (i) E(r) i 1.2 0.124 N 1.0 0.110

QUESTION 5 The following table shows the beta and expected return

QUESTION 5 The following table shows the beta and expected return for each of five stocks. Stock (i) E(r) i 1.2 0.124 N 1.0 0.110 0.7 0.103 0.4 0.068 0.1 0.047 All of these stocks except one lic on the Security Market Linc. Required : Calculate the alpha of the stock that does NOT lic on the Security Market Linc

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