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Investment / Financial Markets Old Exam MFE Forum

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Old 11-16-2018, 04:37 PM
smarterthancandee smarterthancandee is offline
Join Date: Aug 2015
Location: Harrisburg, Pennsylvania
Studying for MFE
College: BU Alumna
Favorite beer: Butterbeer
Posts: 43
Default Question #42 on SOA - questions for finance and investment

In the question they gave the annualized expected rate of return as .07.

I thought that was alpha.

So I did .07-.5*.105^2 to get .0644875 as the mean. But apparently .07 is the mean. So how is alpha different from the mean?

VEE: Mathematical Statistics, Economics, Accounting & Finance
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