Suppose the Risk-Free Return Is 4

question 27

Multiple Choice

Suppose the risk-free return is 4%. The beta of a managed portfolio is 1.2, the alpha is 1%, and the average return is 14%. Based on Jensen's measure of portfolio performance, you would calculate the return on the market portfolio as

• A) 11.5%.
• B) 14%.
• C) 15%.
• D) 16%.

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Definitions:

Intellectual Growth

Intellectual growth is the development of mental faculties and cognitive abilities, often through learning, education, and experience.

Visual Field

the entire area that can be seen when the eyes are focused on a single point, encompassing both the central and peripheral vision.

Occipital Lobe

A region of the brain located at the back of the head, primarily responsible for processing visual information.

Cognitive Behavior

The study of behavioral and mental processes that involves understanding problem solving, memory, and decision making.