Question: Please answer in the space provided below. If you make any calculations, please also describe shortly what formula(s) you used and what input values you

Please answer in the space provided below. If you make any calculations, please also describe shortly what formula(s) you used and what input values you used for formula(s). You already have an overall investment portfolio. You want to add only one of the following two sub-portfolios (Portfolio C and Portfolio D) to your overall investment portfolio. You want to select the portfolio that is performing better. Based on the information provided below, which portfolio would you add to your entire investment portfolio?

How did you select it?

Market risk premium: 1.63 Information on Portfolio C Portfolio C risk premium: 0.358 Portfolio C total risk: 0.133 Security Characteristic Line Regression Statistics for Portfolio C Alpha: 1.63 Beta: 1.20 Information Ratio: 5.11 R-squared: 0.91 Information on Portfolio D Portfolio D risk premium: 0.276 Portfolio D total risk: 0.126 Security Characteristic Line Regression Statistics for Portfolio D Alpha: 5.28 Beta: 0.80 Information Ratio: 5.52 R-squared: 0.64

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