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A small stock that you are following has an alpha = 7% and a standard deviation of its regression residuals of 22.50%. The Sharpe ratio

A small stock that you are following has an alpha = 7% and a standard deviation of its regression residuals of 22.50%. The Sharpe ratio of the market index portfolio M is 0.42. According to the TreynorBlack Model, by how much could this active investor improve his/her Sharpe ratio relative to investing only in the passive market index portfolio M? Enter your answer rounded to four decimal places. For example, if your answer is 12.345 or 0.12345 then enter as .1235

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