Consider the following performance history of Stable Value mutual fund relative to the market.

Stable Value Fund

Date Fund Mkt

1 11% 2%

2 3% 3%

3 4% 6%

4 -1% 0%

The risk-free rate is 2%.

e) What is the alpha of Stable Value?

f) What is the t-statistic of the alpha? Is the alpha statistically different from zero? g) Would you like to add some investment in the Stable Value fund to your market portfolio?