Question

Consider the following information: Portfolio Risk-free Market Expected Return 7% 13.0 11.0 Beta 0 1.0 0.9 a. Calculate the e

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Expected Ret (CAPM ret ) = Risk Free Rate + Beta ( Market Ret - Risk Free Rate)

= 7% + 0.9 ( 13% - 7%)

= 7% + 0.9(6%)

= 7% + 5.4%

= 12.4%

Alpha of Portfolio A = Expected Ret - CAPm Ret

= 11% - 12.4%

= -1.4%

Pls comment, if any further assistance is required.

Add a comment
Know the answer?
Add Answer to:
Consider the following information: Portfolio Risk-free Market Expected Return 7% 13.0 11.0 Beta 0 1.0 0.9...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT