What does it mean when alpha is positive in the risk and return in financial management?
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It can be shown that in an efficient market, the expected value of the alpha coefficient is zero. Therefore, the alpha coefficient indicates how an investment has performed after accounting for the risk it involved: : the investment has earned too little for its risk (or, was too risky for the return)
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4
Answer:
It can be shown that in an efficient market, the expected value of the alpha coefficient is zero. Therefore, the alpha coefficient indicates how an investment has performed after accounting for the risk it involved: : the investment has earned too little for its risk (or, was too risky for the return)
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