forecast is correct, what is the abnormal return (alpha) relative to the CAPM E(r) for Stock: D? Group of answer choices 0.05100 0.04863 0.04626 0.05544 0.05352

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Considering these data where 'P1'
estimates are analyst forecasts of
future stock prices: Stock PO P1 o
B A 48.5 57 0.18 2.4 B 25 27 0.4 1.1
C 33.95 39 0.2 1.3 D 40 47 0.26 1.6
Market Risk Premium 0.0525 T-bill
rate 0.04 Assuming the analyst
forecast is correct, what is the
abnormal return (alpha) relative to
the CAPM E(r) for Stock: D? Group
of answer choices 0.05100
0.04863 0.04626 0.05544 0.05352
Transcribed Image Text:Considering these data where 'P1' estimates are analyst forecasts of future stock prices: Stock PO P1 o B A 48.5 57 0.18 2.4 B 25 27 0.4 1.1 C 33.95 39 0.2 1.3 D 40 47 0.26 1.6 Market Risk Premium 0.0525 T-bill rate 0.04 Assuming the analyst forecast is correct, what is the abnormal return (alpha) relative to the CAPM E(r) for Stock: D? Group of answer choices 0.05100 0.04863 0.04626 0.05544 0.05352
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