Question

JetFlight Corporation had an expected excess return of 8% for the past year. Assume JetFlight's beta is 1.43. However, the economy boomed and the stock market beat expectations by 5%,. What was JetFlight's actual (realized) excess return

Answer 1

If  the economy boomed and the stock market beat expectations by 5%. The JetFlight's actual (realized) excess return is 15.15%

Excess return

Using this formula

Excess return=Expected excess return+(Stock market beats expectation) (beta)

Let plug in the formula

Excess return = 8% + (5%)(1.43) + 0%

DExcess  return=8%+7.15%+0

Excess return = 15.15%

Therefore the JetFlight's actual (realized) excess return is 15.15%

Learn more about excess return here: brainly.com/question/25591140

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