Question
You collected the information below regarding two portfolios: Portfolio X and Portfolio Z. You will invest in only one of these portfolios. The portfolio you
You collected the information below regarding two portfolios: Portfolio X and Portfolio Z. You will invest in only one of these portfolios. The portfolio you will select will be your entire investment (that means your overall investment portfolio). You want to select the portfolio that is performing better. Which portfolio would you select? How did you select it?
Market risk premium: 1.63
Information on Portfolio X
Portfolio X risk premium: 0.358
Portfolio X total risk: 0.133
Security Characteristic Line Regression Statistics for Portfolio X
Alpha: 1.63
Beta: 1.20
Information Ratio: 5.11
R-squared: 0.91
Information on Portfolio Z
Portfolio Z risk premium: 0.276
Portfolio Z total risk: 0.126
Security Characteristic Line Regression Statistics for Portfolio Z
Alpha: 5.28
Beta: 0.80
Information Ratio: 5.52
R-squared: 0.64
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Making Sense Of School Finance
Authors: Clinton Born
1st Edition
1475856652, 978-1475856651
