If you assume an alpha of zero for stocks which have either


You forecast an alpha of 2 percent for stocks that have E/P above the benchmark average and IBES growth above the benchmark average. On average, what must your alpha forecasts be for stocks that do not satisfy these two criteria? If you assume an alpha of zero for stocks which have either above-average E/P or above-average IBES growth, but not both, what is your average alpha for stocks with E/P and IBES growth both below average?

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Portfolio Management: If you assume an alpha of zero for stocks which have either
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