The expected return on Big 5 Fishing Goods was 15.6%, while the realized return was 19.9%....

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The expected return on Big 5 Fishing Goods was 15.6%, while the realized return was 19.9%....

The expected return on Big 5 Fishing Goods was 15.6%, while the realized return was 19.9%. What is Jensen's Alpha for Big 5 Fishing Goods?

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Answer 1

Answer #1

Jensen Alpha is generally calculated after ascertainment of Beta and risk free rate but in this case we are not given with any kind of risk free rate, and beta and we are just given with expected rate of return and realised return.

So jensen's Alpha would be-

(Realised return-expected rate of return)

=(19.9-15.6)= 4.3%

Jensen's Alpha would be 4.3%

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Answer 2

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The expected return on Big 5 Fishing Goods was 15.6%, while the realized return was 19.9%....

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The expected return on Big 5 Fishing Goods was 15.6%, while the realized return was 19.9%....

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The expected return on Big 5 Fishing Goods was 15.6%, while the realized return was 19.9%....