Based on current dividend yields and expected capital gains, the expected rates of return on portfoliosAandBare 7.1% and 8.3%, respectively. The beta ofAis .6, while that ofBis 1.5. The T-bill rate is currently 4%, while the expected rate of return of the S&P 500 index is 8%. The standard deviation of portfolioAis 21% annually, while that ofBis 42%, and that of the index is 31%.

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

PortfolioA	%
PortfolioB	%

b-1.	If instead you could investonlyin bills andoneof these portfolios, calculate the sharpe measure for PortfoliosAandB.(Round your answers to 2 decimal places.)

	Sharpe Measure
PortfolioA
PortfolioB

b-2.	Which portfolio would you choose?
	Portfolio A Portfolio B