8. Consider the two (excess return) index-model regression results for stocks A and B. The risk-free rate over the period was 6%, and the market's average return was 14%. Performance is measured using an index model regression on excess returns. Stock A dex model regression estimates 1% +1.2(M - rf) R-square 0.576 Residual standard deviation, s(e) 10.3% Standard deviation of excess returns 21.6% a. Calculate the following statistics for each stock: i. Alpha ii. Information ratio Stock B 2% +0.8(rm -rf) 0.436 19.1%* 24.9% iii. Sharpe measure iv. Treynor measure h. Which stock is the best choice under the following circumstances?

8. Consider the two (excess return) index-model regression results for stocks A and B. The risk-free rate over the period was 6%, and the market's average return was 14%. Performance is measured using an index model regression on excess returns. a. Calculate the following statistics for each stock: i. Alpha ii. Information ratio iii. Sharpe measure iv. Treynor measure