Multiple Choice
Music Doctors has a beta of 2.25. The annualized market return yesterday was 12%, and the risk-free rate is currently 4%. You observe that Music Doctors had an annualized return yesterday of 15%. Assuming that markets are efficient, this suggests that
A) bad news about Music Doctors was announced yesterday.
B) good news about Music Doctors was announced yesterday.
C) no news about Music Doctors was announced yesterday.
D) interest rates rose yesterday.
E) interest rates fell yesterday.
Correct Answer:
Verified
Correct Answer:
Verified
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