You are looking to invest in one of three stocks.Stock A has high expected earnings growth,Stock B has only modest expected earnings growth and Stock C is expected to generate poor earnings growth.Which stock is likely to generate the greatest alpha for you?
A) Stock A
B) Stock B
C) Stock C
D) You cannot tell from the information given

Question

Quizplus · Accepted Answer

Alpha is a measure of a stock's performance relative to a benchmark, and it cannot be determined solely based on expected earnings growth. Other factors like market conditions, risk, and stock valuation also play a role.

You Are Looking to Invest in One of Three Stocks