What is the annualized risk free rate

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You have run a regression of returns of lulus, against the S&P 500 Index using monthly returns over the last 5 years and arrived at the following regression: R lulus = -.20%+1.5R S&P500. If the stock had a Jensen’s alpha of +0.10% (on a monthly basis) over this period.

1. Estimate the monthly riskfree rate during the last 5 years.

2. What is the annualized risk free rate?

3. What is the monthly risk free rate if the Jensen’s alpha had been 2.4% on an annualized basis?

Reference no: EM13925285

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