Calculate the alpha of stock a

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Reference no: EM132710022

The following information is given to you:

Expected return for the market15%

Standard deviation of the market return 25%

Risk-free rate 8%

Correlation coefficient between stock A and the market 0.8

Standard deviation for stock A 30%

Problem a) What is the beta for stock A?

Problem b) What is the expected return for stock A ?

Problem c) Calculate the alpha of stock A if the actual return from the stock is 16%.

Problem d) What does the beta and alpha indicate about stock A?

Reference no: EM132710022

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