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This year, the stock market's unexpected return is 21% and Stock Z's unexpected return is 37%....

This year, the stock market's unexpected return is 21% and Stock Z's unexpected return is 37%. Stock Z has a beta of 1.9. What is the unsystematic part of Stock Z's unexpected return? Write your answer out to three decimals

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Answer #1

Unsystematic part of unsystematic return=Unexpected return-Market's unexpected return*beta
=37%-1.9*21%
=-2.9000%

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