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Using the Index Model, the Alpha of a Share Is

Question 5

Multiple Choice

Using the index model, the alpha of a share is 3.0%, the beta if 1.1 and the market return is 10%. What is the residual given an actual return of 15%?


A) 0.0%
B) 1.0%
C) 2.0%
D) 3.0%

Correct Answer:

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