02 You want to evaluate the stocks X and Y using data in the table below. The risk-free rate, rf, is 3%. Asset | E(r) a 16% 1.3 40% Y 19% 0.9 30% 11 | 12% 1 20% (a) Suppose you're planning let either X or Y constitute your entire risky (b) Suppose you're planning to add a small amount of either X orY to (c) Suppose you're planning use either X or Y to exploit mispricings in the (d) What is the M2 measure for the two stocks investment. Which would you choose and why? your well-diversified portfolio. Which would you choose and why? market. Which would you choose and why? Now form a new portfolio, Z, by taking a leveraged position in asset X Specifically, invest 150% of your wealth in asset X and finance it with an appropriate short position in the risk-free asset (e) What is the Treynor measure of asset Z? (f) What is the o of asset Z? (g) What is the Information Ratio of asset Z