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Options
- A
It is indicative of outperformance by the fund manager
-
It is indicative of under-performance by the fund manager
Correct answer
- C
It is indicative of over-hedging by the fund manager
- D
It is indicative of under-hedging by the fund manager
Why this is the answer
Alpha is the difference between the actual return of a fund and its expected return, based on the risk taken (as measured by the market index). A negative alpha indicates that the fund has underperformed relative to its benchmark.
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