The following table shows the beta and expected

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13) The following table shows the beta and expected return for each of five stocks. Stock ( i ) i β ( ) i E r 1 1.2 0.124 2 1.0 0.110 3 0.7 0.103 4 0.4 0.068 5 0.1 0.047 All of these stocks except one lie on the Security Market Line. Calculate the alpha of the stock that does NOT lie on the Security Market Line. A) –0.026 B) –0.014 C) 0.000 D) 0.014 E) 0.026
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