A Portfolio Has a Beta of 1

question 63

Multiple Choice

A portfolio has a beta of 1.30 and an actual return of 15.5 percent.The risk-free rate is 3.5 percent and the market risk premium is 8.2 percent.What is the value of Jensen's alpha?

• A) −0.86 percent
• B) 1.01 percent
• C) 1.14 percent
• D) 1.23 percent
• E) 1.34 percent

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Definitions:

Theca Interna

A layer of cells surrounding the ovarian follicle that works in conjunction with granulosa cells to support the development and release of an egg in females.

Granulosa Cells

Cells that surround the developing egg in the ovary and play a crucial role in the maturation of the oocyte and production of hormones like estrogen.

Androgens

A group of hormones that play a role in male traits and reproductive activity; present in both males and females.

Estradiol

A major form of estrogen, a hormone involved in the development and regulation of the female reproductive system and secondary sexual characteristics.