Calculate Jensens alpha for the fund, as well as its information ratio. You have been given the
Question:
You have been given the following return information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .97.
Transcribed Image Text:
Year Fund Market Risk-Free -15.2% 2011 -24.5% 1% 2012 25.1 19.5 9.4 2013 12.4 2014 6.2 7.6 4 -2.2 2015 -1.2 2
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 60% (10 reviews)
First find the average returns of the fund the market and the risk fr...View the full answer
Answered By
Shebla K
I am an MBA graduate having experience as an Assistant Professor at University level for two years. I always prepare well for a class as I believe that only if you become an ocean you can give a bucket of water. Being a teacher was not only my profession but also my passion.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
Question Posted:
Students also viewed these Business questions
-
You have been given the following return information for two mutual funds (Papa and Mama), the market index, and the risk-free rate. Calculate the Sharpe ratio, Treynor ratio, Jensens alpha,...
-
You have been given the following return data on 3 assetsF, G, and Hover the period 20152018. Using these assets, you have isolated 3 investment alternatives: Alternative Investment 1 ........ 100%...
-
You have been given the following return information for two mutual funds (Papa and Mama), the market index, and the risk-free rate. Calculate the Sharpe ratio, Treynor ratio, Jensen's alpha,...
-
Tim plays a computer game. Each game is a win or a loss. He wins three fifths of his first 40 games. He then wins his next 12 games. For all 52 games, Required: work out the ratio wins: losses Give...
-
Which has a greater momentum: A heavy truck at rest or a moving skateboard?
-
Media Moguls (M&M) normally sells 240,000 units per year. It costs M&M $52 to purchase each unit, the fixed cost of ordering is $260, and the carrying costs equal 15 percent of the units purchase...
-
Consider a process with the following streams: (a) Determine MER targets for \(\Delta T_{\text {min }}=10^{\circ} \mathrm{C}\). (b) Design a HEN for MER using no more than 10 heat exchangers...
-
As part of a forensic accounting engagement, you are asked to determine what factors influence the pricing of homes in the local community. Review the data in the following table that has been...
-
The company's consolidated statement of income is provided below: (in millions of dollars) Revenues Sales by company-operated restaurant stores Revenue from franchised stores Total revenues Years...
-
Where do financial institutions obtain funds for making loans? How are the interest rates for loans determined? Are the interest rates the same for all borrowers? Why or why not?
-
What are the Sharpe and Treynor ratios for the fund? You have been given the following return information for a mutual fund, the market index, and the risk-free rate. You also know that the return...
-
Now suppose that the disturbances are not normally distributed, although is still known. Show that the limiting distribution of previous statistic is (1/J) times a chisquared variable with J degrees...
-
According to Table 1, extreme temperature changes can lead to: F. Increased acidity in groundwater. G. The creation of carbonic acid. H. The development of salt crystals. J. Cracked and split rock....
-
A company is expected to pay a dividend of $4.50 per share next year (t=1) and the dividend is expected to grow at a constant rate of 6% forever. The stock is currently selling for $50. Given this...
-
a. Which financial ratios category offers the best "picture" of an organization's condition? Why? b. Which one financial ratio offers the truest snapshot of how an organization is performing? Why? c....
-
Deborah wants to have $1,000,000, 35 years from now. She invested $55,000 that she got from an inheritance. What Rate of return does her investment need to earn in order for her to have the...
-
Tracy Company, a manufacturer of air conditioners, sold 1 5 0 units to Thomas Company on November 1 7 , 2 0 2 4 . The units have a list price of $ 7 6 0 each, but Thomas was given a 2 5 % trade...
-
SE Company is trying to calculate the company's cost of capital. It has a capital structure of 45% debt and 55% equity financing. If the before-tax costs of debt and equity are 6% and 10%,...
-
A summary of the 2017 balance sheet of Alsop Ltd., follows: On January 1, 2017, Alsop acquired 100 percent of the outstanding common stock of Martin Monthly for $62,000 cash. At the time of the...
-
How has the globalization of firms affected the diversity of their employees? Why has increased diversity put an additional burden on accounting systems?
-
Do you think that professional investors can buy a risky portfolio that beats the market in the sense of outperforming portfolio M?
-
Given the results for question 4 above, which portfolio will an investor optimally select to maximize their expected returns per unit risk as measured by the standard deviation of returns (R)? Draw a...
-
Write the expected return of the portfolio combination of the riskless asset in proportion a and risky efficient portfolio P in proportion (1 a). What is the standard deviation of returns for this...
-
x-8x+15 A) Let f(x) = = x2+2x-15 Calculate lim f(x) x 3 2x225x75 B) Let f(x) = x-18x45 Calculate lim f(x) x 15
-
If a dance instructor prices her lessons at $60 per student, she will have three students. If she prices her lessons at $50 per student, she will have four students. How much marginal revenue will...
-
What is the difference between objectives, strategies, and goals? How do these things improve our planning process?
Study smarter with the SolutionInn App