The market is expected to generate an 11% pa return and the risk free rate is 4%
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The market is expected to generate an 11% pa return and the risk free rate is 4% pa.
A portfolio manager has 80% of her capital allocated to stock A with a beta of 0.9 which generated an actual total return of 12%. 20% of her capital is allocated to stock B with a beta of 1.3, which generated an actual total return of 13%
What Alpha was generated by the manager by allocating more capital to stock A?
Related Book For
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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