Question
1)Compute the abnormal rates of return for the three stocks listed here: stock A had a return of 11.5% and beta of 0.95, stock B
1)Compute the abnormal rates of return for the three stocks listed here: stock A had a return of 11.5% and beta of 0.95, stock B had a return of 10% and beta of 1.25, and stock C had a return of 14% of 1.45.Note that the market return during this period was 11%.
2)Note the following stocks: stock A has a price of $25, earnings per share of $2, and expected growth of 2.5%; stock B has a price of $30, earnings per share of $1.5, and expected growth of 3%; stock C has a price of $20, earnings per share of $1.75, and expected growth of 2%.Using a P/E screen, which stock is the most attractive according to cross sectional studies?Using a PEG screen, which stock is the most attractive according to cross sectional studies?
3)What form of the EMH does belief in technical analysis most directly violate?
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