(Regression, Sharpe, Jensen’s alpha, Treynor) Consider the following data concerning the S&P 500, FedEx Company, and the return on 1-year U.S.

Treasury Bills.

a. Compute the excess returns for the S&P 500 and for FedEx.

b. Graph the excess return of FedEx against those of the S&P 500.

Use Excel to compute the regression line and the R2.

c. Is FedEx stock an aggressive or a defensive stock?

d. Calculate the Sharpe ratio, Jensen’s alpha, and Treynor ratio for FedEx.

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A B 1 D 1 FEDEX AND S&P 500 S&P total FedEx 1-year 23456789 Year return return T-bill 2002 -23.37% 4.81% 2.17% 2003 26.38% 24.91% 1.32% 2004 8.99% 46.40% 1.26% 2005 3.00% 5.33% 2.75% 2006 13.62% 5.40% 4.38% 2007 3.53% -17.61% 5.00% 2008 -38.49% -27.67% 3.34% 10 2009 23.45% 31.13% 0.37% 11 2010 12.78% 12.08% 0.47% 12 2011 0.00% -9.66% 0.29% 13 2012 13.41% 10.53% 0.12% 14 2013 29.60% 57.58% 0.16% 15 2014 11.39% 21.39% 0.13%