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Q. Alpha?

Answered By: Bobray Bordelon

Last Updated: Jan 09, 2024 Views: 24

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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