A Portfolio Has a Beta of 1

question 33

Multiple Choice

A portfolio has a beta of 1.42 and an actual return of 13.5%. The risk-free rate is 1.5% and the market risk premium is 7.4%. What is the value of Jensen's alpha?

• A)−.93%
• B)1.05%
• C)1.32%
• D)1.49%
• E)1.69%

---

Definitions:

Deductible Taxes

Taxes that can be subtracted from gross income to reduce taxable income, potentially lowering the amount of income tax owed.

Individual Returns

Individual returns refer to tax filings made by individual taxpayers, detailing income, deductions, and taxes owed or refunded.

Personal Property Tax

Taxes imposed on movable properties, such as vehicles and equipment, as opposed to real estate.

Deductible

An expense that can be subtracted from gross income to reduce the amount of income subject to tax, often related to business expenses, healthcare costs, and certain individual deductions.