Please answer in the space provided below. If you make any calculations, to get any points, please also show clearly and in the correct order what formula(s) you used and what input values you used for each formula(s).

You already have an overall investment portfolio. You want to add only one of the following two sub-portfolios (Portfolio V and Portfolio T) 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 V

Portfolio V risk premium: 0.358

Portfolio V total risk: 0.133

Security Characteristic Line Regression Statistics for Portfolio V

Alpha: 1.63

Beta: 1.20

Information Ratio: 5.11

R-squared: 0.91

Information on Portfolio T

Portfolio T risk premium: 0.276

Portfolio T total risk: 0.126

Security Characteristic Line Regression Statistics for Portfolio T

Alpha: 5.28

Beta: 0.80

Information Ratio: 5.52

R-squared: 0.64