Use the following information to answer the question(s)below.
-Using the average historical excess returns for both Wyatt Oil and the Market portfolio estimate of Wyatt Oil's Beta.When using this beta,the alpha for Wyatt oil in 2007 is closest to:
A)-0.5000%
B)-0.0250%
C)-0.0125%
D)+0.0250%

Question

Use the following information to answer the question(s)below. 
-Using the average historical excess returns for both Wyatt Oil and the Market portfolio estimate of Wyatt Oil's Beta.When using this beta,the alpha for Wyatt oil in 2007 is closest to:
A)-0.5000% 
B)-0.0250% 
C)-0.0125% 
D)+0.0250%

Quizplus · Accepted Answer

C)excess return_average = 11ea7cce_3d0f_953d_928c_817b72ca5203_TB1626_00 excess return_average = 11ea7cce_3d0f_953e_928c_8543fe496662_TB1626_11 11ea7cce_3d0f_bc4f_928c_1131023dde6c_TB1626_00 β_WO= 11ea7cce_3d0f_bc50_928c_2531830fbd6a_TB1626_11 = 11ea7cce_3d0f_bc51_928c_65ce4ede99d2_TB1626_11 = .8375 α = actual return - expected return for CAPM = 5.5% - [3% + .8375(6% - 3%)] = -.0125%

Use the Following Information to Answer the Question(s)below