Alpha Equation

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Definition: Alpha Equation

Alpha Equation
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Full Definition of Alpha Equation

Equation used to compute the alpha of a fund. It is calculated as follows: [ (sum of y) – ((b) (sum of x)) ] / n where n equals the number of observations (36 – 60 months), b = beta of the fund, x = rate of return for the S&P 500 or another benchmark index, and y = rate of return for the fund.

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https://payrollheaven.com/define/alpha-equation/
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Alpha Equation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
April 20, 2024 https://payrollheaven.com/define/alpha-equation/.
Chicago Manual of Style (CMS):
Alpha Equation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/alpha-equation/ (accessed: April 20, 2024).
American Psychological Association (APA):
Alpha Equation. PayrollHeaven.com. Retrieved April 20, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/alpha-equation/

Definition Sources

Definitions for Alpha Equation are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.