A Stock's Alpha Is Defined as the Stock's

question 53

Multiple Choice

A stock's alpha is defined as the stock's:

• A)expected return minus its required return.
• B)expected return minus its actual return.
• C)nominal return minus its required return.
• D)required return minus its actual return.

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Definitions:

Rate Of Interest

The percentage of a loan incurred as interest cost to the borrower, usually expressed as an annual rate.

Future Value

The value of an investment at a specific date in the future, considering compounding interest.

Cash Flows

The total amount of money being transferred into and out of a business, particularly in terms of liquidity and financial planning.

Present Value

The value in today's dollars of a future sum of money, adjusted for interest or inflation.