A Portfolio Has a Beta of 1

question 82

Multiple Choice

A portfolio has a beta of 1.25 and an actual return of 13.0%. The risk-free rate is 4.0% and the market risk premium is 8.2%. What is the value of Jensen's alpha?

• A)−.86
• B)−1.01
• C)−1.14
• D)−1.25
• E)−1.34

---

Definitions:

Psychic Determinism

The psychoanalytic concept that all mental processes are not spontaneous but are determined by the unconscious or pre-existing mental complexes.

Mental Causality

The concept that thoughts, beliefs, and mental states can cause events in the physical world, including actions and behaviors.

Unconditional Positive Regard

A concept in client-centered therapy proposing unconditional acceptance and support of a person regardless of what they say or do.

Popular Culture

The set of ideas, perspectives, attitudes, images, and other phenomena that are within the mainstream of a given culture, especially as circulated through mass media.