Answered By: Barbara Coffey Last Updated: Sep 24, 2019 Views: 12
Answered By: Barbara Coffey
Last Updated: Sep 24, 2019 Views: 12
In finance, Alpha is the return on an investment relative to an index.
If the stock or portfolio returned 10% and the S&P or other benchmark index returned 5% then alpha would be 5%.
Alpha = Realized return – (Risk free rate + Beta(Market Return – Risk Free Rater)
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