The US Treasury Bill Has a Return of 2

question 10

Multiple Choice

The U.S. Treasury bill has a return of 2.84% while the S&P 500 is returning 10.84%. Your portfolio has an actual return of 14.76% and a beta of 1.31. What is the portfolio's Jensen's alpha?

• A)−.47%
• B)−.92%
• C)1.37%
• D)1.44%
• E)1.57%

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Definitions:

Quarterly Deposits

Regular deposits made into an investment or savings account every three months.

Future Value

Future value is a financial concept that estimates how much an investment will be worth at a future date, considering factors like interest earned or capital gains.

Compounded Quarterly

Refers to the process where interest is calculated and added to the principal sum every quarter (every three months) so that subsequent interest calculations are based on the increased principal.

Annual Lease Payments

The total amount paid over a year for the use of leased property or equipment.