One Year Ago, Matt Bought 100 Shares of ACE Corp

question 2

Essay

One year ago, Matt bought 100 shares of ACE Corp. for $5,619 including commission. He is about to sell the ACE share for $6,528 net of commissions. When he made the purchase the ASX 300 index was at 907; now it is 1070. The beta of ACE share is 0.98, and the market's risk- free rate is 4.0%. No dividends were paid. Based on Jensen's measure, did Matt make a good purchase?

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Definitions:

Thermodynamics

The branch of physics that deals with the relationships and conversions between heat and other forms of energy.

Second Law

An ambiguous term that may refer to the second law of thermodynamics, which states that the entropy of an isolated system not in equilibrium almost always increases.

Thermodynamics

The branch of physics that deals with the relationships between heat and other forms of energy, and how they affect matter.

Potential Energy

The energy possessed by a body by virtue of its position relative to others, stresses within itself, electric charge, and other factors.