Consider an Asset That Has a Beta of 1

question 70

Multiple Choice

Consider an asset that has a beta of 1.5. The return on the risk-free asset is 6.5% and the expected return on the stock index is 15%. The estimated return on the asset is 20%. Calculate the alpha for the asset.

• A)19.25%
• B)0.75%
• C)-0.75%
• D)9.75%
• E)9.0%

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