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Question 7 5 pts Given the following information, calculate Eagle Funds alpha: T-Bill Return: 5% S&P 500 Return: 12% Beta: 0
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Answer #1

Actual return on the fund = ( 135 -100) /100 = 35%

Expected return using CAPM = Risk free rate + Beta * Market premium

= 5% + 0.85 *( 12% -5%)

= 10.95%

Alpha = 35% -10.95% = 24.05%

Option 24.05%

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