consider the two index model

would you 0. Consider the two (excess return) index-model regression results for stocks A and B. The risk-free rate over the period was 6%, and the market's average return was 14%. Performance is measured using an index model regression on excess returns. Index model regression estimates R-square Residual stando deviation, ole) Standard devistior of excess returns Stock A 1% + 1.2/- 0.576 10.3% 21.6% Stock B 2% +0.81- 0.436 19.1% 24.9% a. Calculate the following statistics for each stock: i. Alpha ii. Information ratio iii. Sharpe ratio iv. Treynor measure b. Which stock is the best choice under the following circumstances? i. This is the only risky asset to be held by the investor. ii. This stock will be mixed with the rest of the investor's portfolio, currently composed solely of holdings in the market-index fund. Ill. This is one of many stocks that the investor is analyzing to form an actively managed stock portfolio Suppose the 1-year risk-free rate of return in the US is 6.6% and the 1-year risk-free rate of return in Britain is 7%. The current exchange rate is 1 pound = U.S. 51.65. A 1-year future exchange rate of for the pound would make a US. Investor indifferent between investing in the US, security and Investing in the British security Calculate your answer to four decimal places