A portfolio manager summarizes the input from the macro and micro forecasters in the following table:

Micro Forecasts
Asset	Expected Return (%)			Beta	Residual Standard Deviation (%)
Stock A		23		1.2		74
Stock B		21		1.9		79
Stock C		20		0.9		68
Stock D		15		1.0		63

Macro Forecasts
Asset	Expected Return (%)			Standard Deviation (%)
T-bills		8			0
Passive equity portfolio		19			24

a. Calculate expected excess returns, alpha values, and residual variances for these stocks. (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round "Alpha values" to 1 decimal place.)

b. Compute the proportion in the active portfolio and the passive index. (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as decimals rounded to 4 places.)

c. What is the Sharpe ratio for the optimal portfolio? (Do not round intermediate calculations. Enter your answer as decimals rounded to 4 places.)

d. By how much did the position in the active portfolio improve the Sharpe ratio compared to a purely passive index strategy? (Do not round intermediate calculations. Enter your answer as decimals rounded to 4 places.)

e. What should be the exact makeup of the complete portfolio (including the risk-free asset) for an investor with a coefficient of risk aversion of 3.2? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Stock A Stock B Stock C Stock D Excess returns % % % % Alpha values % % % Residual variances Proportion in Active Portolio Proportion in Passive Index Final Positions Bills % M % A % B % % D % Total %