Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. if an investors holds a diversified portfolio whic

If an investors holds a diversified portfolio which has risk exposures to the market portfolio,...

60.1K

Verified Solution

Question

Finance

If an investors holds a diversified portfolio which has risk exposures to the market portfolio, the size factor portfolio and the value factor portfolio. Betas and the risk premium of the factor portfolios are shown in the table below: Question: Suppose you expect that investors portfolio will earn 20% per year and the risk-free rate is 2% per year. What is the abnormal return (alpha) the investor is expected to earn?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

[20 pts] In a random poll taken in 2008, Gallup asked 1010 national adults whether they...

Finance
1.2K views

Suppose that you are a consultant that gives advice to small entrepreneurial firms that want to...

Biology
1.2K views

Usually,deforestationreplaces abiodiverseecosystem witha(n)ecosystemA. equally diverseB. similarly diverseC. less diverseD. substantially morediverse

Physics
1.2K views

1 Two spherical stars A and B emit blackbody radiation The radius of A is...

Physics
1.2K views

Two short magnets placed along the same axis with their like poles facing each other...

Calculus
1.2K views

depth width The strength of a beam is proportional to the width and the square...

Accounting
1.2K views

Polaski Company manufactures and sells a single product called a Ret Operating at capacity, the...

Accounting
1.2K views

SCX is a $2 billion chemical company with a plastic plant located in Durango, Colorado....

Accounting
1.2K views

Al Alton Appliance-Coronado Bank Reconciliation December 31, 2018 BANK BOOKS Balance, Dec. 31, 2018 $...

Accounting
1.2K views

In John Balfour's credit card account interest is charged on the average daily balance. The...

Accounting
1.2K views

Missing Amounts from Balance Sheet and Income Statement Data One item is omitted in each...

Finance
1.2K views

Your broker offers to sell you some shares of Bahnsen & Co. common stock that...