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:

Indicated Bonds

Refers to specific bonds in a molecular structure that are highlighted or implied to be of interest in a chemical reaction or process.

Wavenumber

Wavenumber is a unit of measure used in spectroscopy to represent the number of wave cycles per unit of distance, commonly inversely proportional to wavelength.

Carbon-Carbon Triple Bond

A chemical bond between two carbon atoms involving six bonding electrons instead of the usual two, making it stronger and shorter than single and double bonds.

Binomial Populations

Populations characterized by two possible outcomes for each observation, such as success or failure, often modelled using the binomial distribution.