A Portfolio Has an Actual Return of 15

question 33

Multiple Choice

A portfolio has an actual return of 15.17 percent,a beta of .85,and a standard deviation of 7.2 percent.The market return is 13.4 percent and the risk-free rate is 2.8 percent.What is the portfolio's Jensen's alpha?

• A)2.25 percent
• B)2.51 percent
• C)2.67 percent
• D)3.36 percent
• E)4.04 percent

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Definitions:

Heartbeat

The rhythmic contraction and expansion of the heart, often considered a vital sign of life.

Breathing

The process of inhaling oxygen and exhaling carbon dioxide from the atmosphere, essential for life.

Functional Death

The absence of a heartbeat and breathing.

Cultural Conceptions

The collective beliefs and values that define and interpret various aspects of a culture, shaping behaviors, norms, and customs.