Alpha for portfolio


Suppose Portfolio A has an expected return of 8%, volatility of 20%, and beta of 0.5. Suppose the market has an expected return of 10% and volatility of 25%. Finally, suppose the risk-free rate is 5%. What is Jensen's alpha for Portfolio A?

A.10.0%

B.1.0%

C.0.5%

D.15%

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Finance Basics: Alpha for portfolio
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