Suppose the Risk-Free Return Is 4

question 27

Multiple Choice

Suppose the risk-free return is 4%. The beta of a managed portfolio is 1.2, the alpha is 1%, and the average return is 14%. Based on Jensen's measure of portfolio performance, you would calculate the return on the market portfolio as

• A) 11.5%.
• B) 14%.
• C) 15%.
• D) 16%.

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Definitions:

Life And Accident Insurance

A type of insurance that provides compensation in case of death or specific bodily injuries as a result of an accident.

Tax Code

The laws, rules, and regulations that govern tax liabilities and benefits, influencing how individuals and businesses are taxed.

Coverage Amounts

The maximum amount that an insurance policy will pay out for a covered loss or damage.

Defined Benefits

A type of pension plan in which the benefits that an employee will receive at retirement are predefined based on factors such as salary history and tenure.