Alpha Equation

Business, Legal & Accounting Glossary

Definition: Alpha Equation

Alpha Equation

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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Modern Language Association (MLA):
Alpha Equation. Payroll & Accounting Heaven Ltd.
December 06, 2021
Chicago Manual of Style (CMS):
Alpha Equation. Payroll & Accounting Heaven Ltd. (accessed: December 06, 2021).
American Psychological Association (APA):
Alpha Equation. Retrieved December 06, 2021
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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.