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One Year Ago, Matt Bought 100 Shares of ACE Corp

Question 2

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One year ago, Matt bought 100 shares of ACE Corp. for $5,619 including commission. He is about to sell the ACE share for $6,528 net of commissions. When he made the purchase the ASX 300 index was at 907; now it is 1070. The beta of ACE share is 0.98, and the market's risk- free rate is 4.0%. No dividends were paid. Based on Jensen's measure, did Matt make a good purchase?

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