) similarly b rate is currently 5%, whereas the expected rate of return of the S&P 500 index is 13%The standard deviation of portfolio A is 12% annually, that of Bis 31%, and that of the S&P 500 index is 18%. a. If you currently hold a market-index portfolio, would you choose to add re be wise to folios to your holdings? Explain. b. If instead you could invest only in T-bills and one of these portfolios, which would you choose? . Consider the two (excess return) index-mo xdel regression results for stocks A and B. The risk- free rate over the period was 69 , and the market's average return was 14%. Performance is measured using an index model regression on excess returns. Stock A Stock B Index model regression estimates R-square Residual standard deviation, ar(e) Standard deviation of excess returns 576 10.3% 21.6% 436 19.1% 24.9% a. Calculate the following statistics for each stock i. Alpha ii. Information ratio iii. Sharpe ratio iv. Treynor measure h year (these eturn? What b. Which stock is the best choice under the following circumstances? i. This is the only risky asset to be held by the investor i. This stock will be mixed with the rest of the investor's portolio, currently composed solely of holdings in the market-index fund ii. This is one of many stocks that the investor is analyzing to form an actively managed stock portfolio. imino and security selection abilities of four manasers whose perfor