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1) Compute the abnormal rates of return for the following stocks during period t ( ignore differential systematic risk): Stock Ri t Rmt B 11.5%
1) Compute the abnormal rates of return for the following stocks during period t ( ignore differential systematic risk):
Stock Ri t Rmt
B 11.5% 4.0%
F 10.0 8.5
T 14.0 9.6
C 12.0 15.3
E 15.9 12.4
2)Compute the abnormal rates of return for the five stocks in Problem 1 assuming the following systematic risk measures ( betas):
Stock B1
B 0.95
F 1.25
T 1.45
C 0.70
E - 0.30
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