Explore BrainMass

Explore BrainMass

    Positive Alphas

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Although alpha represents superior performance why can't positive alphas alone guarantee a superior portfolio performance.

    Please discuss in detail and include at least 2 quality references.

    © BrainMass Inc. brainmass.com June 4, 2020, 2:01 am ad1c9bdddf
    https://brainmass.com/business/finance/432580

    Solution Preview

    Although alpha represents superior performance why can't positive alphas alone guarantee a superior portfolio performance?
    The positive alphas alone cannot guarantee superior performance of the portfolio because of several reasons. You should remember that Alpha is only one of the five technical risk ratios. The others are R-squared, standard deviation, beta and the Sharpe ratio. So, depending only on one of the technical risk ratios for the entire portfolio is not advisable. It does not take other technical risk ratios into account(2). ...

    Solution Summary

    This response presents a brilliant discussion on Positive Alphas

    $2.19

    ADVERTISEMENT