LaForge Investment Group will use the risk-adjusted rate of return to assist it in arriving at Jensen's
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LaForge Investment Group will use the risk-adjusted rate of return to assist it in arriving at Jensen's Measure for the year. Its beta coefficient for the portfolio is 1.2, the risk-free rate is 1%, and the market returned 9%. During the year the portfolio returned 12%, determine Jensen's Measure?
Beta CoefficientBeta coefficient is a measure of sensitivity of a company's stock price to movement in the broad market index. It is an indicator of a stock's systematic risk which is the undiversifiable risk inherent in the whole financial system. Beta coefficient... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Financial Management Principles and Applications
ISBN: 978-0133423822
12th edition
Authors: Sheridan Titman, Arthur Keown, John Martin
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