Your Portfolio Actually Earned 4

question 41

Multiple Choice

Your portfolio actually earned 4.39% for the year. You were expecting to earn 6.27% based on the CAPM formula. What is Jensen's alpha if the portfolio standard deviation is 12.1% and the beta is .99?

• A)−5.28%
• B)−3.40%
• C)−2.34%
• D)−2.40%
• E)−1.88%

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Definitions:

Postoperative Pain

Pain experienced by patients after undergoing surgical procedures.

Negative Expectations

Anticipatory beliefs or thoughts that lead to experiencing negative outcomes because one unconsciously conforms their behavior to those beliefs.

Surgical Procedure

A medical operation involving the cutting of body tissues or organs to repair or remove a part of the body or to diagnose a condition.

Sensory Adaptation

A reduction in sensitivity to a stimulus after constant exposure to it, allowing organisms to focus on changes in their environment.