A Portfolio with a Beta of 0 $-0.005$ B) $0.040$

question 24

Multiple Choice

A portfolio with a beta of 0.5 has a return of 5% and a standard deviation of 10%.If the risk-free rate is 2% and the market return is 9%,calculate the Jensen's alpha measure for the portfolio.

• A) \( -0.005 \)
• B) \( 0.040 \)
• C) \( 0.055 \)
• D) \( 0.057 \)

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Definitions:

Unintended Consequences

Outcomes that are not anticipated or intended, often as a result of an action or a series of actions that diverge from the original objectives.

Base Pairs

Units of double-stranded DNA consisting of two nucleotides located on opposite complementary DNA or RNA strands that are connected via hydrogen bonds.

Amino Acids

Organic compounds that combine to form proteins, serving as the building blocks of life.

Chemicals

Substances with a distinct molecular composition that are used or produced in processes involving changes to molecules or atoms.