Why do we call alpha a nonmarket return premium Why are high alpha stocks desirable investments for active portfolio managers With all other parameters held fixed, what would happen to a portfolios Sharpe ratio as the alpha of its component securities increased ...

The total risk premium equals a b market risk premium We call alpha ...

Why do we call alpha a nonmarket return premium? Why are high-alpha stocks desirable investments for active

Question:

Why do we call alpha a “nonmarket” return premium? Why are high-alpha desirable investments for active managers? With all other parameters held fixed, what would happen to a portfolio’s Sharpe ratio as the alpha of its component securities increased?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... 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...