Question
You find that the expected return for the market is 13.7% and the risk free rate is 1.8%. You are interested in Morgan Stanley (MS).
You find that the expected return for the market is 13.7% and the risk free rate is 1.8%. You are interested in Morgan Stanley (MS). You know the beta of MS is 0.75. However, you think the Capital Asset Pricing Model (CAPM) is not complete, and you do your own personal analysis. You think that the expected return of MS should be 14.4%. Base on this, what would be the alpha of MS?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus, Lorne Switzer, Maureen Stapleton, Dana Boyko, Christine Panasian
9th Canadian Edition
1259271935, 9781259271939
