Compute the required return with β=−0.028, a 5% risk-free rate and a 6% premium, subtract it from the actual 12.54% to get 7.71% a year, and note the S&P 500 benchmark.
2
Beta dressed up as alpha
List the risks a single market beta misses, such as liquidity, currency and commodity risk, and record the alternative-betas reading of headline hedge fund alpha.
3
Growth of a dollar: volatility versus smoothness
Describe the fund's smooth path against the S&P 500's wild ride, and record that investors pay for high return delivered smoothly, not for smoothness alone as in T-bills.