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Use the Following Information to Answer the Question(s) Below

Question 3

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Use the following information to answer the question(s) below.

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New information arrives that does not change any of these numbers, but it does change the expected returns of the following stocks:

Use the following information to answer the question(s)  below.  Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New information arrives that does not change any of these numbers, but it does change the expected returns of the following stocks:     -The expected alpha for Wyatt Oil is closest to: A) -3.00%. B) -1.00%. C) 0.00%. D) 3.00%.

-The expected alpha for Wyatt Oil is closest to:


A) -3.00%.
B) -1.00%.
C) 0.00%.
D) 3.00%.

Correct Answer:

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