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The returns for stock A and market portfolio are as follows:
1. Year: 2006, Stock A Return: 11%, Market portfolio return: 9%
2. Year: 2007, Stock A Return: 10% Market portfolio return: 2%
3. Year: 2008, Stock A Return: 3% Market portfolio return: 1%
Market risk premium is 5% and risk-free rate is 2%.
(6 MARKS) What are the beta of your asset A?
(5 MARKS) What is your stock As Jensens alpha? Is stock A under- or over-valued?
(3 MARKS) What is the Sharpe ratio of the stock A?
(2 MARKS) What is the Treynor measure of performance evaluation?
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