A Portfolio with a Beta of 1 $-0.005$ B) $-0.002$

question 39

Multiple Choice

A portfolio with a beta of 1.7 has a return of 15% and a standard deviation of 10%.If the risk-free rate is 5% and the market return is 119%,calculate the Jensen's alpha measure for the portfolio.

• A) \( -0.005 \)
• B) \( -0.002 \)
• C) \( 0.004 \)
• D) \( 0.009 \)

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Definitions:

Total Stockholders' Equity

The total net value owned by the shareholders of a company, calculated as the difference between total assets and total liabilities.

Common Stock Dividends Distributable

A liability recorded on a company's balance sheet for dividends declared on common stock but not yet paid to shareholders.

Paid-in Capital

The amount of money a company has received from shareholders in exchange for shares of stock.

Stock Dividend

A dividend payment made in shares of the company's stock rather than cash.