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:

Injunction

A legal order from a court requiring a person to do or refrain from doing a specific action.

Pharmacy

A place where drugs and medicines are prepared and dispensed by a licensed pharmacist.

Anticipatory Repudiation

A situation in contract law where one party prematurely conveys their decision not to fulfill the contract terms, breaching the agreement.

Toady

A person who flatters or defers to others for a self-serving purpose; essentially, a sycophant.