A portfolio manager generated a rate of return of 15.5% on a portfolio with beta of 1.2. If the risk-free rate of return is 2.5% and the market return is 11.8%, Jensen's alpha for the portfolio is closest to:
Jensen's alpha = Rp - [Rf + βp (Rm - Rf )]= 0.155 - [0.025 + 1.2 x (0.118 -0.025)] = 0.0184.