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Rank the following stocks from the highest to lowest alpha, given the risk-free rate of 3.1 percent and the market risk premium of 8 percent.
Rank the following stocks from the highest to lowest alpha, given the risk-free rate of 3.1 percent and the market risk premium of 8 percent. (Hint: compare to what is expected from CAPM) Stock Beta Expected Return A 0.81 9.00 B 1 12.88 C 0.92 11.92 D 1.14 12.22 C>D>B>A A>C>D>B B>C>D>A D>A>B>C OA>D>B>C Rank the following stocks from the highest to lowest alpha, given the risk-free rate of 3.1 percent and the market risk premium of 8 percent. (Hint: compare to what is expected from CAPM) Stock Beta Expected Return A 0.81 9.00 B 1 12.88 C 0.92 11.92 D 1.14 12.22 C>D>B>A A>C>D>B B>C>D>A D>A>B>C OA>D>B>C
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