A survey of over 200 European fund managers conducted in 2008 and published in the Hedge Fund Journal (May 2008) revealed the wide range of portfolio performance measures were being employed by managers: Method Usage by fund managers (%) M-squared 3.3% Jensen's Alpha 36.5% T-squared N/A (a) Explain each of these three performance measures using formulae and graphs. (15 marks) (b) Calculate all three performance measures for the investment portfolio described below. Return on portfolio: 10% Return on market: 13% Beta for portfolio: 0.90 Standard deviation of returns for portfolio: 20% Standard deviation of returns for market: 40% Risk-free rate: 0.5%