
Explanation:
Jensen's Alpha =
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Q.2754 You have been provided the following information about a portfolio:
| Return of the portfolio | 10% |
|---|---|
| Beta of the portfolio | 1.1 |
| Standard deviation of portfolio | 6% |
| Return on the market | 7% |
| Risk-free rate | 3% |
Calculate the Jensen’s alpha for the portfolio.
A
3.2%
B
1.7%
C
2.6%
D
4.2%