(Jensen’s alpha) Thomas manages an investment firm. His firm’s investments have beta of 0.7. The market risk premium is 6%, and the risk-free rate in the economy is 2%. Thomas presents you the following offer: “Let me manage your portfolio and I’ll provide an annual return of 7% (this return is gross, i.e., before management fees). I’ll only charge management fees of 1%.” Would you take his investment offer?