Darden Capital - MontyCello Fund case.  Based on the data in the case, answer the following questions:

 

How should Steve Majocha formulate a strategy for achieving the Monticello Fund team goal of beating the S&P 500?

Should the team adjust for risk in evaluating the attractiveness of the proposed stocks? If so, how?

Calculate the Sharpe Ratio, Treynor ratio, Jensen's Alpha and M-squared measure of the stocks, and rank the stocks.  If the rankings differ, which measure do you judge to be the best?

Which two to three stocks appear to provide the most attractive investment opportunity for the Monticello Fund?

Consider the two top ranked stocks.  Is a 50-50 portfolio of the two stocks superior than the individual stocks.  Analyze with data. 

Answer rating: 100% (QA)

ANSWER Q1 Steve Majocha should consider a multifactor approach to selecting stocks that have the potential to beat the SP 500 He should look at factors such as valuation growth prospects management qu... View the full answer