Question: Data: Risk & Return: Q =1.25 ; r f =2% ; and R M =12% . Cash Flows: g=5% and is constant; the last dividend

Data:

Risk & Return: Q=1.25; rf=2%; and RM=12%.

Cash Flows: g=5% and is constant; the last dividend paid was D0=$2.00

1.Is there a relationship between Jensens Alpha and the arbitrage level of return?

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