Question
Consider the information shown in the table below and answer the questions that follow. Matts Portfolio Julies Portfolio Total portfolio return 12% 15% Portfolio standard
Consider the information shown in the table below and answer the questions that follow.
| Matts Portfolio | Julies Portfolio |
Total portfolio return | 12% | 15% |
Portfolio standard deviation | 10% | 16% |
Portfolio Beta | 1.1 | 1.9 |
Risk-Free Rate | 4% | |
Market Return | 10% |
a. Calculate Sharpes measure for Matt and for Julie. Show work and express the answers as decimals rounded to two decimal places.
b. Calculate Treynors measure for Matt and for Julie. Show work and express the answers as percentages rounded to two decimal places.
c. Calculate Jensens alpha for Matt and for Julie. Show work and express the answers as unrounded percentages.
d. Explain why Matts portfolio would be considered better than Julies portfolio, even though Julies had a higher return. In other words, WHY are the measures higher for Matt than for Julie? You may give your explanation by completing the following sentence: Julie had a higher return than Matt, but Julie
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