1. ABC stock has a beta that is 13 percent higher than the overall market beta. The risk-free rate is 3.1 percent, and the market rate of return is 10.6 percent. What is the company’s cost of equity?
12.27%
10.91%
11.58%
16.08%
15.48%
2. Serial correlation:
coefficients tend to range between 0.75 and 1.
supports weak form efficiency.
best indicates that markets are semi-strong form efficient.
tends to prove that markets are totally inefficient.
is best used to identify insider trading.