Assume the Jensen approach to portfolio valuation is being used a
Assume the Jensen approach to portfolio valuation is being used.
a. Draw a market line similar to that in Figure 22–4 on page 573. That is, show 0 excess returns at a 0 portfolio beta and 3 percent excess returns at a portfolio beta of 1. Now graph the three portfolios.
b. Which portfolio(s) over- or underperformed the market?
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