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Alpha

Discussion in 'Investing Glossary' started by Sim, 26th Sep, 2006.

  1. Sim

    Sim Guest

    Alpha is the return a share or portfolio earns over and above the market rate of return or beta. A positive alpha indicates the investment has earned on average a premium over and above that of the overall market.

    Active managers seek to add alpha to a fund through stock selection and other investment decisions.

    See also: http://www.invested.com.au/71/beta-2673/ and http://www.invested.com.au/71/delta-9132/.
     
    Last edited by a moderator: 29th Mar, 2008