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You are given the following information about a stock X: i) The stock has a Sharpe ratio of 0.4. ii) Its correlation with the market
You are given the following information about a stock X:
i) The stock has a Sharpe ratio of 0.4.
ii) Its correlation with the market is 0.7.
iii) The stock's volatility is 35%.
Suppose that the Sharpe ratio for the market is 0.5.
Calculate alpha for the stock X
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