ABCDE Mutual fund produced a return of 17% last year. It is a large cap...
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ABCDE Mutual fund produced a return of 17% last year. It is a large cap growth fund that has a beta (relative to the S&P 500) of 1.2. ABCDE's benchmark, which is the Russell 1000 Large Cap Growth Index has a beta of 1.3 (relative to the S&P 500) and produced a return of 16% during the same time period. Which of the following is true about the alpha of Fund ABCDE's for past year?
| a. | The sign of the alpha cannot be determined | |
| b. | Alpha is Negative | |
| c. | Alpha is Positive | |
| d. | Alpha is zero |
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