You are the Fund Manager for a retiree pension fund. Its after the year end and you are to undertake an evaluation of your stocks for the year ended 31 December 2019. You have already calculated the preliminary performance statistics and the same are summarized in the table below. Assume a risk-free rate of 4%.

	Stock 1	Stock 2	Stock 3	ALSI (Index)
AM (%)	10.3	10.2	9.5	10.1
SD (%)	18.4	15.3	12.6	15.0
Beta	1.05	0.75	0.36	1
SSD (%)	12.4	10.8	8.4	10.2

Required:

1. Assess the performance of the individual stocks for the year 2019 using the Jensen Alpha methodology. [6 Marks]
2. Calculate and comment on the comparison of a Treynors ratio assessment to that of (a) above. [4 Marks]
3. Assuming 40% of the budget was invested in Stock 1 and 30% in Stock 2, determine the expected return of a portfolio comprising the three stocks.

[5 Marks]

4. Evaluate the performance of this portfolio with reference to its requited performance. [5 Marks]

[TOTAL: 20