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Residex has a beta of 1.0. The annualized market return yesterday was 10%, and the risk-free rate is currently 4%. You observe that Residex had
Residex has a beta of 1.0. The annualized market return yesterday was 10%, and the risk-free rate is currently 4%. You observe that Residex had an annualized return yesterday of 12%. Assuming that markets are efficient, this suggests that
Select one:
a.
bad news about Residex was announced yesterday.
b.
good news about Residex was announced yesterday.
c.
no news about Residex was announced yesterday.
d.
the market return was abnormal relative to Residex.
e.
Residex's returns are normal.
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