The following data are available relating to the performance of Monarch stock fund and the

market portfolio.

Monarch Market Portiolo

Average Retum

$16\%$

$12\%$

Standard Deviation ot Relums

$26\%$

$22\%$

Bela

$1\mathrm{.}15$

Residual Slandard Deviation

$14\%$

N

The risk$-$free return during the sample period was $4\%.$

a$.$ What is the information ratio measure of performance evaluation for Monarch stock fund $(2)$

b$.$ calculate Sharpes measure of performance for Monarch stock fund.

c$.$ calculate Treynor's measure of performance for Monarch stock fund.

d$.$ calculate Jensen's measure of performance for Monarch stock fund.

Provide a full discussion on sourses of abnormal returns. $(6)$

Discuss the different forms of market efficiency, including weak form and strong form and the

implication for the random walk theory. $(6)$

Define active and passive portfolio management respectively. What are their main objectives? $(4)$