Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 13, Problem 5PS
Summary Introduction

To compute: Company F’s abnormal rate of return.

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Analysis of 60 monthly rates of return on United Futon common stock indicates a beta of 1.53 and an alpha of –0.28% per month. A month later, the market is up by 5.8%, and United Futon is up by 6.8%. What is Futon’s abnormal rate of return?
Analysis of 60 monthly rates of return on United Futon common stock indicates a beta of 1.54 and an alpha of -0.29% per month. A month later, the market is up by 5.9%, and United Futon is up by 6.9%. What is Futon's abnormal rate of return? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Rate of return % K
Analysis of 60 monthly rates of return on United Futon common stock indicates a beta of 1.46 and an alpha of -0.21% per month. A month later, the market is up by 5.1%, and United Futon is up by 6.1 %. What is Futon's abnormal rate of return? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Rate of return (1.34)
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