Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are 7.4% and 10.1%, respectively. The beta of A is .7, while that of B is 1.8. The T-bill rate is currently 4%, while the expected rate of return of the S&P 500 index is 8%. The standard deviation of portfolio A is 22% annually, while that of B is 43%, and that of the index is 32%. a. If you currently hold a market index portfolio, what would be the alpha for Portfolios A and B? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 1 decimal place.) Portfolio A % Portfolio B % b-1. If instead you could invest only in bills and one of these portfolios, calculate the sharpe measure for Portfolios A and B. (Round your answers to 2 decimal places.) Sharpe Measure Portfolio A Portfolio B b-2. Which portfolio would you choose? Portfolio A Portfolio B

Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and Bare 7.4% and 10.1%, respectively. The beta of Als 7, while that of Bis 1.8. The T-bill rate is currently 4%, while the expected rate of return of the S&P 500 Index Is 8%. The standard deviation of portfolio A is 22% annually, while that of Bis 43%, and that of the Index is 32% a. If you currently hold a market Index portfolio, what would be the alpha for Portfolios A and B? (Negative value should be indicated by a minus sign. Do not round Intermediate calculations. Round your answers to 1 decimal place.) Portfolio B Portfolio A Portfolio B A b-1. If Instead you could Invest only in bills and one of these portfolios, calculate the sharpe measure for Portfolios A and B. (Round your answers to 2 decimal places.) Sharpe Measure Portfolio A Portfolio B b-2. Which portfolio would you choose? Portfolio A Portfolio B