Consider an Asset That Has a Beta of 1

question 12

Multiple Choice

Consider an asset that has a beta of 1.5. The return on the risk-free asset is 6.5 percent and the expected return on the stock index is 15 percent. The estimated return on the asset is 20 percent. Calculate the alpha for the asset.

• A) 19.25 percent
• B) 0.75 percent
• C) -0.75 percent
• D) 9.75 percent
• E) 9.0 percent

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Definitions:

Call Back

The action of a salesperson or company returning a phone call to a client or prospect, often to provide information or continue a sales process.

Did Not Buy

A situation in which a prospective customer decides against making a purchase after considering a product or service.

Networking Prospects

Potential contacts or leads generated through networking activities, which may result in business opportunities.

First Conversation

The initial interaction or communication between individuals, often setting the tone for future exchanges.