A Stock Has a Return of 16

question 82

Multiple Choice

A stock has a return of 16.9 percent, a standard deviation of 11.7 percent, and a beta of 1.57. The risk-free rate is 2.65 percent and the market risk premium is 8.45 percent. What is the Jensen-Treynor alpha of this stock?

• A) -1.37 percent
• B) -1.09 percent
• C) -0.48 percent
• D) 0.29 percent
• E) 0.63 percent

---

Definitions:

Population

The total number of inhabitants of a particular town, area, country, or species, often analyzed in demographic studies.

Rooting Reflex

An involuntary response in newborns, where they turn their head towards anything that strokes their cheek or mouth, aiding in the act of breastfeeding.

Body Rhythms

The natural cycles or patterns of physical, mental, and behavioral changes in living beings, often influenced by the environment, such as circadian rhythms.

Generalized Slowing Hypothesis

The theory that processing in all parts of the nervous system, including the brain, is less efficient.