You estimate the following equation for the historical excess returns of five ASX-listed stocks: R; - R, = a + B (RM-R) +e; You use excess returns on the S&P/ASX200 as the explanatory variable in each regression. The average excess return on the S&P/ASX200 is 12% with standard deviation of 25%. Key regression estimates and stock return statistics are presented in the table below. Which stock has the highest Treynor ratio? Alpha Beta Average excess Standard deviation of residuals return Standard deviation of returns Stock 1 0.015 0.80 0.014 0.111 0.200 0.325 Stock 2 0.005 1.30 0.011 0.161 Stock 3 0.021 1.20 0.015 0.165 0.300 Stock 4 -0.017 1.40 0.017 0.151 0.350 Stock 5 0.003 1.25 0.019 0.153 0.313 O Stock 1 O Stock 5 Stock 4 O Stock 2 O Stock 3