Suppose the Risk-Free Return Is 3

question 29

Multiple Choice

Suppose the risk-free return is 3%. The beta of a managed portfolio is 1.75, the alpha is 0%, and the average return is 16%. Based on Jensen's measure of portfolio performance, you would calculate the return on the market portfolio as

• A) 12.3%.
• B) 10.4%.
• C) 15.1%.
• D) 16.7%.

---

Definitions:

Weekly Salaries

Weekly salaries are fixed amounts paid to employees on a weekly basis as compensation for their work.

Salary Expense

The cost incurred by an employer for the payment of salaries to employees, considered an operating expense.

Salaries Payable

Liabilities representing the amounts owed to employees for work performed and not yet paid.

Salaries Accrued

This denotes the salaries that employees have accrued but the company has not yet disbursed.