Question

How is the alpha of a particular investment differentiated from the beta!
(A) The alpha is ex post and is identified using option pricing models
(B) The alpha is ex post and is identified using factor models
(C) The alpha is ex ante and is identified using option pricing models
(D) The alpha is ex ante and is identified using factor models​

Answer 1

Answer:

Factor Indexes performance scorecard

MSCI has designed a family of factor indexes that reflect the performance of equity “risk premia” factors (Minimum Volatility, Yield, Quality, Momentum, Value, Size, Growth) across global geographies. In addition to single factor indexes, MSCI also offers multi-factor indexes which aims to give institutional investors a foundation for implementing multi-factor strategies transparently and efficiently. MSCI factor indexes are built using MSCI’s Barra Risk Factor Models used by sophisticated investors for several decades.