Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 8) suppose you were evaluating the performance of

8) Suppose you were evaluating the performance of three different funds. Your analysis produces the following...

80.2K

Verified Solution

Question

Finance

8) Suppose you were evaluating the performance of threedifferent funds. Your analysis produces the following results:

Fund

Alpha

Beta

Hedge fund following a market neutral strategy

0.1

1.6

Mutual fund investing actively in stocks and bonds

-0.1

0.4

Index Fund tracking the S&P 500 Index

0.1

1.6

Describe the performance of each fund (i.e. good, bad, averageetc.) and explain your answer in each case.

Answer & Explanation Solved by verified expert
4.1 Ratings (619 Votes)
Alpha Meaning of AlphaAlpha measures performance of stock If Alpha is positive it means that stock has performed better than market If Alpha is negative it shows than stock has under performed than the market If it is Zero it means it has performed as the market Formula of Alpha Return of Stock or portfolio CAPM Return Where CAPM Return is Risk Free    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

8) Suppose you were evaluating the performance of threedifferent funds. Your analysis produces the following results:FundAlphaBetaHedge fund following a market neutral strategy0.11.6Mutual fund investing actively in stocks and bonds-0.10.4Index Fund tracking the S&P 500 Index0.11.6Describe the performance of each fund (i.e. good, bad, averageetc.) and explain your answer in each case.

Other questions asked by students

Q

5. Briefly describe two major theories of human evolution and the evidence that support them.

Biology
Q

Capsaicin is the compound that makes hot peppers spicy. This compound reversibly binds to the same...

Chemistry
Q

A major difference between autism spectrum disorder ASD and attention deficit hyperactivity disorder ADHD is...

Biology
Q

Given the point A 3 5 find the image after performing the following two transformations...

Geometry
Q

Exxon/Mobil scientists flew over an ocean oil spill that looked like a large circular disc.At...

Basic Math
Q

UB faculty union is organizing a trip for at least 600 of its members to...

Basic Math
Q

Leah is flying from Moncton to Vancouver with a connection in Montreal. The probabilitythat her...

Basic Math
Q

For the polynomial function f x 8x x 2 answer the following questions a List...

Calculus
Q

Use a calculator to approximate the given expression Round your answers to the nearest hundredth...

Algebra
Q

Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate...

Accounting
Q

Assume the taxpayer does NOT wish to contribute to the Presidential Election Fund, unless otherwise...

Accounting
Q

The value of a fund grows according to the accumulation function a(t)=(1+0.02t). A deposit of...

Finance