Suppose an analyst has a measured alpha of .2% with a standard error of 2%, as in

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Suppose an analyst has a measured alpha of .2% with a standard error of 2%, as in our example. What is the probability that the positive alpha is due to luck of the draw and that true ability is zero?

.P-96

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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Question Posted: Jul 31, 2024 06:00 AM

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Suppose an analyst has a measured alpha of .2% with a standard error of 2%, as in

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