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The market is expected to generate a 11% return and the risk free rate is 4%. A portfolio manager has 80% of her capital allocated
The market is expected to generate a 11% return and the risk free rate is 4%. A portfolio manager has 80% of her capital allocated to stock A with a beta of 0.9, which generated a total return of 12%. 20% of her capital is allocated to stock B with a beta of 1.3, which generated a total return of 13%. What concept is demonstrated to explain the alpha being generated by the manager?
Multiple Choice
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Capital allocation
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Stock picking
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Technical analysis
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Fundamental analysis
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