Question 8 You believe the stock of IBM to be underpriced. In order to verify this belief and to get an impression of the extent of underpricing, you want to compute the stock's alpha. The risk free rate is 4%, the market portfolio has an expected return of 10%, and a standard deviation of 10%. IBM has and expected return of 15% and a covariance with the market of .015. 8.1 Homework. Unanswered What is the alpha of IBM? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a -3% b 0% 2% d 4% e None of the above. Question 8 You believe the stock of IBM to be underpriced. In order to verify this belief and to get an impression of the extent of underpricing, you want to compute the stock's alpha. The risk free rate is 4%, the market portfolio has an expected return of 10%, and a standard deviation of 10%. IBM has and expected return of 15% and a covariance with the market of .015. 8.1 Homework. Unanswered What is the alpha of IBM? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a -3% b 0% 2% d 4% e None of the above