Exhibit 25 -Refer to Exhibit 25

question 20

Multiple Choice

Exhibit 25.9
Use the Information Below for the Following Problem(S)
Consider the following information for four portfolios, the market and the risk free rate (RFR) :
$$\begin{array} { l l l l } \text { Partidio } & \text { Return } & \text { Eet. } & \text { ED } \\\hline \text { A1 } & 0.15 & 1.25 & 0.182 \\\text { A2 } & 0.1 & 0.9 & 0.223 \\\text { A3 } & 0.12 & 1.1 & 0.138 \\\text { A4 } & 0.08 & 0.8 & 0.125 \\\text { Market } & 0.11 & 1 & 0.2 \\\text { RFR } & 0.03 & 0 & 0\end{array}$$
-Refer to Exhibit 25.9.Calculate the Jensen alpha Measure for each portfolio.

• A) A1 = 0.014, A2 = -0.002, A3 = 0.002, A4 = -0.02
• B) A1 = 0.002, A2 = -0.02, A3 = 0.002, A4 = -0.014
• C) A1 = 0.02, A2 = -0.002, A3 = 0.002, A4 = -0.014
• D) A1 = 0.02, A2 = -0.002, A3 = 0.02, A4 = -0.14
• E) None of the above

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Definitions:

Total Asset Turnover

A measure of how efficiently assets are employed by a company to generate revenue from sales.

Equity Multiplier

A financial ratio that measures a company's total assets financed by its shareholders' equity, indicating leverage level.

Return On Equity

A measure of a corporation's profitability, indicating how much profit a company generates with the money shareholders have invested.

Debt-Equity Ratio

A measure that indicates the balance between equity contributed by shareholders and debt employed to finance company assets.