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:

Collection Agency

A business that pursues payments of debts owed by individuals or businesses on behalf of creditors.

Demand for Payment

A formal request made by a creditor to a debtor requiring the latter to pay an outstanding debt by a specified deadline.

Delinquent Debtor

An individual or entity that has not met their debt obligations by the due date or within an agreed timeframe.

Employer Notification

The formal process by which employers inform their employees or relevant authorities about specific events, changes, or decisions.