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Galactic Alpha Balanced Fund has a beta of 1.7 and an actual annual return of the fund during the past year was 14.5%. The risk-free
Galactic Alpha Balanced Fund has a beta of 1.7 and an actual annual return of the fund during the past year was 14.5%. The risk-free rate is 1.1% and the market risk premium is 5.8%.
a) What is the value of Jensen's alpha?
b) What does the this alpha tell you? Is this fund good investment or not?
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