Alpha Calculator
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Alpha Calculator
This Alpha Calculator will compute the value of alpha based on the Capital Asset Pricing Model. This CAPM-based approach will take the portfolio return, risk-free rate, beta, and market return, and calculate alpha from these elements:
Here is a snippet of the alpha calculator template:
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Capital Assets Pricing Model (CAPM)
The CAPM formula is expressed as follows:
r = Rf + beta (Rm – Rf) + Alpha
Therefore,
Alpha= R – Rf – beta (Rm-Rf)
Where:
R represents the portfolio return
Rf represents the risk-free rate of return
Beta represents the systemic risk of a portfolio
Rm represents the market return
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Analyst Certification FMVA® Program
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is financial modeling?
- How do you build a DCF model?
- What is sensitivity analysis?
- How do you value a business?
