Suppose the CAPM model determines asset returns and prices.  If the risk free rate is 3%, the market expected return is 9%, and an asset has a Beta of .8 and an expected return of 10%, what would you do to create alpha?  What would your estimate of alpha be?

Answer rating: 100% (QA)

To create alpha we need to generate a return that is higher than what the CAPM model predicts The CA... View the full answer