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The expected return of stock EA is 25.75% if the expected return of the market portfolio is 22%. When the expected return of the market
The expected return of stock EA is 25.75% if the expected return of the market portfolio is 22%. When the expected return of the market portfolio is 10%, the expected return of the stock EA is 10.75%. If the risk-free rate is 3%, and the market return is equally likely to be 22% or 10%, what is the alpha of stock EA? Do not round intermediate calculations.
A.
-1.0%
B.
4.9%
C.
2.6%
D.
-3.3%
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