Consider a small cap value portfolio where the investment manager generates 0.26% of Carhart alpha. The risk-free rate of return is 2.25%, the return of the market is 9.75%, the value risk premium is 3.50% and the size premium is 2.55%. This manager has an exposure to the value premium of 75% and a 35% exposure to the size premium. The consultant, who advises the client on the performance of the manager uses CAPM to assess manager performance and has determined the investment manager generated 0.68% of Jensen's alpha. Determine the value for Beta the consultant is using. O 1.41 O 1.44 O There is insufficient information to answer the question O 1.39

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Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.