What Is the Alpha of a Portfolio with a Beta

question 50

Multiple Choice

What is the alpha of a portfolio with a beta of 2 and actual return of 15%?

• A) 0%
• B) 13%
• C) 15%
• D) 17%

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Definitions:

Systematic Variance

The portion of total variance in a set of data that is attributable to identifiable factors or variables, as opposed to random variance.

Group Means

The average values obtained from different samples or sets of data, representing the central tendency of each group.

Grand Mean

The mean of means, calculated by taking the average of several group means, used in statistical analysis to summarize overall data.

Significance Level

See alpha level.