A Portfolio Has a Beta of 1

question 25

Multiple Choice

A portfolio has a beta of 1.52 and an actual return of 13.7 percent.The risk-free rate is 2.7 percent and the market risk premium is 7.8 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)1.37 percent

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Definitions:

Environmental Threats

Dangers originating from the surrounding environment that can potentially cause harm to living organisms or ecological systems.

Introspection

Inspecting or watching one's personal thought and emotional patterns.

Cognitive Processes

Cognitive processes are the mental functions or operations by which individuals acquire, process, store, and retrieve information, including perception, memory, and reasoning.

Ecological Validity

The extent to which research findings accurately represent real-world settings.