Use the following information to answer the question(s) below.

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New information arrives that does not change any of these numbers, but it does change the expected returns of the following stocks:

-The expected alpha for Taggart Transcontinental is closest to:

Question

Use the following information to answer the question(s) below.

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New information arrives that does not change any of these numbers, but it does change the expected returns of the following stocks:

-The expected alpha for Taggart Transcontinental is closest to:

Quizplus · Accepted Answer

The expected alpha is calculated as the difference between the actual return and the expected return based on the market model. The closest value to the expected alpha for Taggart Transcontinental is -1.00%.

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