9) Consider the single-index model. The alpha of a stock is 0%. The return on the market index is 10%. The risk-free rate of return is 5%. The stock earns a return that exceeds the risk-free rate by 10%, and there are no firm-specific events affecting the stock performance. The of the stock is A) 0.67. B) 0.75. C) 1.0. D) 1.33. E) 2.0.

10) Using the single index model, what is the alpha of a stock with beta of 1.5, a market return of 14%, risk free rate of 3% and the actual return of the stock is 19%?

A) 1.37% B) 0.75% C) 1.80% D) 0.5% E) 3.12%