Question: 3.b. Bargav wealth managers had two portfolios but they have to decide which one of the following has to be offered to the client based

3.b. Bargav wealth managers had two portfolios but they have to decide which one of the following has to be offered to the client based on the following information:

Observed Return Beta

Portfolio A 25% 1.75

Portfolio B 15% 1.15

The risk-free rate is 7.5 %.

Return on the market portfolio is 14%

Standard Deviation of the market is 8%

In order to help Bargav wealth managers make decisions, calculate, Jensen index for Portfolio A and B, and identify which one of the two portfolios is better.

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