help with question 37 only pls

Part II. Calculations and Short Answers (30 points) 36. The average retums, standard deviations and betas for three funds A, B, and Care given below along with data for the S&P 500 index, which is used as a proxy for the market portfolio. The risk-free rate during the sample period is 9%. Fund A B C S&P 500 index Average Return 13.6% 13.1% 12.4% 12% Std. Dev. 40% 25% 30% 15% Beta 1.1 1 1.3 1 (a) Calculate the Sharpe measure for each of the three funds A, B, and C. Which fund will you choose based on the Sharpe measure? (b) Calculate the Treynor measure for each of the three funds A, B, and C. Which fund will you choose based on the Treynor measure? (c) Calculate the Jensen measure for each of the three funds A, B, and C. Which fund will you choose based on the Jensen measure? 37. Assume that Google stock is currently trading at S680. The call option on Google with an exercise price of $680 is priced at $20.70. The put option on Google with an exercise price of $680 is priced at $18.45. Immediately before the expiration of these option contracts, Google will announce its quarterly earnings. From past experience, you expect Google stock price to have a big move, either up or down, when the company reports its earnings. a) What would be a simple option trading strategy using both a put and a call to exploit your conviction about Google stock price movement upon its earnings report! b) How far would the price have to move in either direction for you to make a profit in this trade? c) Draw the payoff and profit/loss diagrams for your option trading strategy. Mark clearly the breakeven points. 38. You are managing a bond portfolio of S4 million. Your target duration is 10 years, and you can choose from two bonds: a zero-coupon bond with maturity 7 years, and perpetuity with a yield of 10%. (a) How much perpetuity in S) will you hold in your portfolio