more. 7. Calculating a beta coefficient for a portfolio Aa Aa Graffiti Computers is a public company, and Computers Fund is a relatively well-diversified mutual fund. The following two graphs show regressions for the market's historic realized returns versus historic realized returns on Graffiti Computers and Computers Fund. Graph A Graph B HISTORIC REALIZED RETURNS HISTORIC REALIZED RETURNS 20% 20% O o 10% 10% O o bo -20% 10% -20% -10% O O OO 10% 20% HISTORIC REALIZED RETURNS ON THE MARKET (Percent 10% 20% HISTORIC REALIZED RETURNS ON THE MARKET (Percent) O o -10% o -10% OOO O -20% -20% Which of the graphs most accurately represents the relationship between the market historic realized returns and realized returns on Computers Fund? Graph A Graph B Ch 03: Assignment - Risk and Return: Part II Which of the following measures the average return earned by a portfolio, over and above the risk-free rate of return, divided by the standard deviation of the portfolio's average returns? Jensen's alpha Treynor's reward-to-volatility ratio Sharpe's reward-to-variability ratio The following table reports some of the regression results for Graffiti Computers and Computers Fund. Regression Coefficient Probability of t-Statistic Lower 95% Confidence Interval Upper 95% Confidence Interval Institution t-Statistic 0.00 -0.09 0.93 -0.02 0.02 1.66 9.71 0.00 1.32 2.01 Graffiti Computers Intercept Slope (beta) Computers Fund Intercept Slope (beta) 0.00 0.49 0.00 0.01 0.70 0.00 1.20 21.10 1.09 1.32 Which of the following statements are consistent with the data for Computers Fund? Check all that apply. The CAPM explains its average return very well. The estimated beta is 1.32. The estimated beta is 1.20. The CAPM poorly explains its average return