JRossSter

I think that question 60 could’ve been worded differently. If you have alpha and residual variance then you don’t need the Beta so not sure why you would require Beta in this scenario. Unfortunately the explanation doesn’t provide any help either. You could make a case for both of the answers but I really hope a question like this does not pop up on the real exam.

JRossSter

1. Ok even if loyalty refers to just employer loyalty, she was being disloyal to employer by not acting in the best interest of the employer’s client accounts. How is Independence and Objecticity violated?
53. Can anyone else confirm that Residual Income actually refers to the RI formula (NI - $k) and the EVA formula (NOPAT - $WACC)?
60. I see their point of view. To get alpha you need beta. But you already have alpha. Nothing we can do about something like this.