A Stock Has a Return of 16

question 72

Multiple Choice

A stock has a return of 16.9%, a standard deviation of 11.7%, and a beta of 1.50. The risk-free rate is 2.89% and the market risk premium is 8.45%. What is the Jensen-Treynor alpha of this stock?

• A)−1.37%
• B)−1.09%
• C)−.48%
• D).89%
• E)1.05%

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Definitions:

Younger Federalists

Members of a younger generation within the Federalist Party, which was a first American political party advocating for a strong national government.

Democratic-Republican Policy

pertains to the early political ideology in the United States that championed states' rights and an agrarian-based economy, opposed to the Federalist focus on centralized federal government and commerce.

Jefferson's Embargo

A law enacted in 1807 by President Thomas Jefferson that prohibited American ships from trading in all foreign ports, intending to protect American interests.

New England

New England is a region in the northeastern United States, comprising six states (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut), known for its colonial history and distinct seasonal weather.