What conclusions can you draw regarding the alpha generated


1. The risk free rate is 2%, the risk premium for the market is 5%, and a stock has an expected return of 10.5%. What is the firm’s beta?

2. A firm has a beta of 1.3 and the risk premium for the market is 6%. If the firms expected return is 11%, what is the risk free rate?

3. A firm with a beta of 1.5 has a market return of 15% when the risk free rate is 3% and the risk premium for the market is 5%. What conclusions can you draw regarding the alpha generated from this investment?

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Financial Management: What conclusions can you draw regarding the alpha generated
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