For the typical Mutual Fund, the ex post alpha averages

Name: For the typical Mutual Fund, the ex post alpha averages
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The ex post alpha measures the difference between the actual return of a fund and the expected return based on its level of risk. In theory, the alpha should be zero for a well-diversified portfolio that is priced correctly, meaning that its returns should be in line with the market. Therefore, the correct answer is A) 0%.

For the Typical Mutual Fund, the Ex Post Alpha Averages