14. Security A has an expected rate of return of 12% and a beta of 1.10. The market expected rate of return is 8% and the risk-free rate is 5%. The alpha of the stock is . A. -1.7% B. 3.7% C. 5.5% D. 8.7%

B. 3.7%

Explanation:

As per the CAPM, Expected return = Risk-free rate + Beta*(Expected return on the market - Risk-free rate)

Expected return% = 5% + 1.1% * (8% - 5%)

Expected return% = 5% + 1.1% *3%

Expected return% = 5% + 3.3%

Expected return% = 8.3 %

The alpha of the stock = Excess return

Excess return = 12% - 8.3%

Excess return = 3.7%

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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