B7. Given the following information on well diversified portfolios X and Y, the Market, and the risk-free rate: X Y Market Risk-free Average Return (%) 12 10.5 10 3 Beta 1.20 1.10 1 0 Standard Deviation (%) 31 25 20 0 B7a. Calculate the Sharpe ratio for portfolios X, Y and the Market. [1 mark] B7b. Compute the Jensen's alpha for portfolios X and Y. Assume that Jensen's alpha for the market is zero. [2 marks] B7c. Compute the Treynor ratio for portfolios X, Y and the Market. [1 mark] B7d. Suppose you can choose only one of the risky portfolios X or Y to invest in as part of a complete portfolio. That is, you can combine the chosen risky portfolio with investing or borrowing at the risk-free rate. Would you choose X or Y? Why? [2 marks]