What Is Jensen's Alpha of a Portfolio Comprised of 45

question 10

Multiple Choice

What is Jensen's alpha of a portfolio comprised of 45 percent portfolio A and 55 percent of portfolio B? The risk-free rate is 3.1 percent and the market risk premium is 6.8 percent.

• A)-1.25 percent
• B)0.47 percent
• C)1.08 percent
• D)1.46 percent
• E)2.04 percent

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Definitions:

Retrograde Amnesia

Failure to remember events that occurred prior to physical trauma because of the effects of the trauma.

Myelination

Myelination is the process by which nerve fibers are coated with myelin, a fatty substance that speeds up the transmission of electrical signals along neurons.

Information Processing

A theory describing the analysis, manipulation, and storage of information by the brain.

Elaborative Rehearsal

The kind of coding in which new information is related to information that is already known.