You are considering the purchase of a mutual fund. You have found three funds that meet your basic criteria. Each fund has a different alpha. Which alpha indicates the preferred investment?
A)the most negative alpha
B)the least negative alpha
C)the zero alpha
D)the lowest positive alpha
E)the highest positive alpha

Question

Quizplus · Accepted Answer

A higher alpha indicates that the fund has outperformed its benchmark index, so the highest positive alpha would indicate the preferred investment.

You Are Considering the Purchase of a Mutual Fund