Question: The expected returns, standard deviations, and betas for three funds are given below along with data for the S&P 500 index. The risk-free rate of

The expected returns, standard deviations, and betas for three funds are given below along with data for the S&P 500 index. The risk-free rate of return is 4%

Portfolio	Expected return	Standard deviation	Beta
A	11.6%	30%	1.1
B	11.1%	25%	1.0
C	10.4%	30%	1.3
S&P 500	9%	15%	1.0

What is the alpha of portfolio A?

	A.	2.6%
	B.	1.7%
	C.	2.1%
	D.	1.2%

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