2. Consider the following performance history of Stable Value mutual fund relative to the market. Stable Value Date Fund Mkt 1 11%. 2% 2 3% 3% 3 4% 6% 4 -1% 0%

The risk free rate is 2%. a) Did Stable Value outperform the market? By how much? b) Please compare the Sharpe Ratio of Stable Value to that of the market portfolio. Which is a better investment based on the Sharpe Ratio analysis? c) What is M2 of Stable Value?

d) Please compare the Treynor Ratio of Stable Value to that of the market? Which is a better investment based on the Treynor Ratio analysis? e) What is the alpha of Stable Value?

f) What is the Information Ratio of Stable Value? g) Would you like to add some investment in the Stable Value fund to your market portfolio?