Stock Rit Rmt Beta A 12.10% 5.20% 0.96 B 11.20% 8.80%
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Question:
Stock |
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|
| |||
A | 12.10% | 5.20% | 0.96 | |||
B | 11.20% | 8.80% | 1.30 | |||
C | 15.10% | 10.20% | 1.50 | |||
D | 13.00% | 16.00% | 0.78 | |||
E | 17.10% | 13.30% | (0.32) |
1. Given the stock information above,
a. Compute the abnormal rates of return for each stock during period t (ignore differential systematic risk)
b. Compute the abnormal rates of return for the above stocks, assuming the systematic risk measures (betas) given.
c. Compare the abnormal returns in parts (a) and (b) and discuss the reason for the difference in each case.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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