Q5. Suppose that during the most recent 5-year period, the average annual rate of return on an aggregate market portfolio was 11% and the average nominal rate of return on government T-bills was 5.5%. You are also told that the standard deviation of an annual rate of return for the market portfolio over the past 5 years was 4%. You want to examine the risk-adjusted performance of the portfolios W, X, Y and Z, and compare the performances with the markets risk-adjusted return.

Portfolio	Return	Beta	Standard Deviation
W	0.17	1.3	0.04
X	0.11	1	0.05
Y	0.22	1.6	0.1
Z	0.15	1.25	0.05

Q5a. Compute the Sharpe measure for each portfolio and the market portfolio.

Q5b. Compute the Treynor measure for each portfolio and the market portfolio.

Q5c. Rank the portfolios using Sharpe and Treynor measures and explain the cause for any differences you find in the rankings.

Q5d. Compute the Jensens alpha for Portfolio W