A Stock Had a Return of 16

question 11

Multiple Choice

A stock had a return of 16.4 percent and a beta of 1.2. The market return was 12.1 percent and the risk-free rate was 5.2 percent. What is the Jensen-Treynor alpha for the stock?

• A) 2.82%
• B) 2.43%
• C) 2.74%
• D) 2.92%
• E) 2.51%

---

Definitions:

Cost Objects

Any item for which a separate measurement of costs is desired; examples include a product, a service, a project, or a customer.

ABC

Can refer to Activity-Based Costing, a method of assigning costs to products or services based on the resources they consume.

Activities

In a business context, activities refer to the various tasks, operations or functions performed within the organization to achieve its objectives.

Drive Costs

Strategies or actions taken to reduce, control, or manage expenses in a business to improve profitability.