Expected returns beyond required returns are referred to as an asset’s: A) beta. B) ex ante returns. C) alpha. Your answer: B was incorrect. The correct answer was C) alpha. Alpha returns are returns beyond the required return expected on an asset given its level of risk. Why is B wrong? The definition of ex ante alpha is expected returns - required returns.
> B) ex ante returns. This is not excess return, this is return itself.
which return? the exxpected return? i was starting to think B is wrong because ex ante returns is a real term–ex ante alpha is.
You have a point, but I think it is C because there is no such thing as ex ante returns. There is ex ante alpha, and I don’t like this question!
You got schwezerized! The thing they were testing here it that you read ‘ex ante alpha’ (which is a type of alpha) and not ‘ex ante returns’ (no such thing)
ex ante and ex post.