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You have run a regression of returns of Devonex, a machine tool manufacturer, against the S&P 500 Index using monthly returns over the last 5

You have run a regression of returns of Devonex, a machine tool manufacturer, against

the S&P 500 Index using monthly returns over the last 5 years and arrived at the following

regression:

ReturnDevonex = - 0.20% + 1.50 ReturnS&P 500

If the stock had a Jensens alpha of +0.10% (on a monthly basis) over this period, estimate

the monthly riskfree rate during the last 5 years.

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