EOC Problems $9-2$

Question $4$ of $15$

eBook

Problem $9-2$ Jensen's Alpha

Suppose that the market return was $12\%$ and the risk$-$free rate was $2\%.$ What is the Jensen's alpha for these three portfolios?

$\backslash$table$[[,$Return,beta$],[$Portfolio $1,9\mathrm{.}00\%,0\mathrm{.}75],[$Portfolio $2,15\mathrm{.}00\%,1\mathrm{.}25],[$Portfolio $3,10\mathrm{.}00\%,0\mathrm{.}95]]$

A$)$ What is the alpha for portfolio $1?$

The alpha for portfolio $1$ is $\%.$ Round your answer to two decimal places.

B$)$ What is the alpha for portfolio $2?$

The alpha for portfolio $2$ is $\%.$ Round your answer to the nearest two decimals.

C$)$ What is the alpha for portfolio $3?$

The alpha for portfolio $3$ is $\%.$ Round your answer to the nearest two decimals.

$0-$ Icon Key