1. Compute the abnormal rates of return for the following stocks during period t (ignore differential systematic risk):
Stock Rit Rmt
B 11.5% 4.0%
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F 10.0 8.5
T 14.0 9.6
C 12.0 15.3
E 15.9 12.4
Rit= return for stock i during period t
Rmt for the aggregate market during period t
2. Compute the abnormal rates of return for the five stocks in Problem 1 assuming the following systematic risk measure (betas):