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:

Gilded Age

A period in late 19th-century America characterized by rapid economic growth, technological innovation, and ostentatious wealth, but also marked by social inequality and political corruption.

Skilled Workers

Workers having special knowledge, training, or ability in their field of work, often requiring extensive education or apprenticeship.

Production Process

The series of actions and operations involved in manufacturing goods and products, starting from the raw material stage to the final product.

Apprentices

Individuals, often young, who learn a trade or craft from a skilled employer, agreeing to work for a specified period in return for instruction.