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Consider an Asset That Has a Beta of 1

question 21

Multiple Choice

Consider an asset that has a beta of 1.5.The return on the risk-free asset is 6.5% and the expected return on the stock index is 15%.The estimated return on the asset is 20%.Calculate the alpha for the asset.


Definitions:

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Factoring

The process of breaking down an expression into a product of its simpler factors.

Equation

A mathematical statement asserting the equality of two expressions, typically involving variables and constants.

Factoring

The process of breaking down an expression into a product of simpler elements or factors.

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