Question #124
Reading: Reading 20 Discounted Dividend Valuation
PDF File: Reading 20 Discounted Dividend Valuation.pdf
Page: 49
Status: Unattempted
Correct Answer: A
Question
If an investor were attempting to capture an asset's alpha returns, the expected holding period return (HPR) would be:
Answer Choices:
A. lower than the required return
B. the same as the required return
C. higher than the required return
Explanation
Alpha returns are returns in addition to the required returns, so the expected HPR would
be higher than the required return.