The Only Way It Can Be Possible to Earn a Positive

question 46

Multiple Choice

The only way it can be possible to earn a positive alpha and beat the market is if some investors are holding portfolios with ________ alphas.

• A) positive
• B) zero
• C) negative
• D) none of the above

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Definitions:

Useful Life

The estimated period over which a fixed asset is expected to be usable by a company, beyond which it is considered to depreciate.

Average Rate of Return

A financial ratio that calculates the average annual return an investor can expect over the lifetime of an investment, expressed as a percentage of the original investment.

Residual Value

The estimated value that an asset will have at the end of its useful life, after considering depreciation or amortization.

Useful Life

The estimated duration of time over which an asset is expected to be functional and contribute to a company's operations.