Based on current dividend yields and expected capital gains, the expected rates of return on portfolios Aand B are 9.7% and 12.1%, respectively. The beta of A is .9, while that of B is 1.7. The T-bill rate is currently 5%, while the expected rate of return of the S&P 500 index is 10%. The standard deviation of portfolio A is 19% annually, while that of B is 40%, and that of the index is 29%.

a.	If you currently hold a market index portfolio, what would be the alpha for Portfolios A and B?(Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 1 decimal place.)

Portfolio A	%
Portfolio B	%

b-1.	If instead you could invest only in bills and one of these portfolios, calculate the sharpe measure for Portfolios A and B. (Round your answers to 2 decimal places.)

	Sharpe Measure
Portfolio A
Portfolio B

b-2.

Which portfolio would you choose?

	Portfolio A
	Portfolio B